PURPOSE OF TOOL
Highly versatile and user-friendly Excel model for the preparation of a 5-year rolling 3 statement (Income Statement, Balance Sheet, and Cash flow Statement) financial projection with a monthly timeline for a startup or existing distribution business generating revenue through the sale of products to the target market and other ancillary income.
The model allows the user to model the distribution of up to 10 product categories (can be extended) and 5 ancillary income streams. The model includes 5 cost of sale categories for each product category (e.g. product cost, shipping cost, handling costs, duties, etc.) with functionality to model inventories for each product category.
The model follows good practice financial modeling principles and includes instructions, line item explanations, checks/input validations, and incorporates a discounted cash flow valuation calculation using the projected cash flows.
The key outputs include:
– Projected full financial statements (Income Statement, Balance Sheet, and Cashflow Statement) presented on a monthly basis across up to 5 years and summarised on an annual basis.
– Dashboard with:
o Summarised projected Income Statement and Balance Sheet
o Compounded Annual Growth Rate (CAGR) for each summarised income statement and balance sheet line item
o List of key ratios including average revenue growth, average profit margins, average return on assets and equity, and average Debt to Equity ratio.
o Bar charts summarising income statement and balance sheet projections
o Gross Profit margin by product in table and bar-chart format
– Discounted cash flow valuation using the projected cash flow output.
Inputs are split into income statement and balance sheet Inputs. Most inputs include user-friendly line item explanations and input validations to help users understand what the input is for and populate correctly.
– Name of business;
– First projection year and month;
– Naming for product categories, cost of goods categories, other income, other variable costs, marketing costs, staff costs, admin costs, fixed assets, and borrowings;
– Sales tax applicability for products, cost of goods, other income & expenses, and fixed assets.
– Opening balance sheet (for existing businesses);
– Income Statement actuals (for trend analysis);
– Revenue inputs including sales volume, sales prices, and average credit terms offered;
– Cost of goods inputs including cost per unit, safety stock percentage and average credit terms received;
– Variable cost inputs including the percentage of revenue applicable to and cost percentage of revenue;
– Other costs inputs including staff costs, marketing costs, and admin costs;
– Sales and corporate tax inputs including rate and payment periods;
– Dividend inputs including amount (percentage of retained earnings) and frequency;
– Fixed assets including addition amounts and useful life;
– Borrowings including addition amounts and interest rate;
– Share capital additions;
– Discount rate inputs (for valuation calculation).
The model comprises of 9 tabs split into input (‘i_’), calculation (‘c_’), output (‘o_’) and system tabs. The tabs to be populated by the user are the input tabs (‘i_Setup’, ‘i_Actuals’, and ‘i_Assumptions’). The calculation tab uses the user-defined inputs to calculate and produce the projection outputs which are presented in ‘o_Fin Stats’, ‘o_Charts’, and ‘o_DCF’.
System tabs include:
– A ‘Front Sheet’ containing a disclaimer, instructions, and contents;
– A checks dashboard containing a summary of checks by tab.
Other key features of this model include the following:
– The model follows good practice financial modeling guidelines and includes instructions, line item explanations, checks, and input validations;
– The model contains a flexible timeline that allows for a mix of actual and forecast period across a 5-year period. This allows projections to be easily rolled forward as forecast periods become actual period;
– Timeline is split on a monthly basis and summarised on an annual basis;
– The model allows the user to model up to 10 separate product categories with their own unique cost of goods setup;
– The model is not password protected and can be modified as required following download;
– The model is reviewed using specialized model audit software to help reduce the risk of formula inconsistencies;
– The model allows for the following number of underlying categories for each line item (these can be easily expanded if required):
o Products – 10 categories;
o Cost of Goods Sold – 5 categories (for each product category);
o Other variable costs – 5 categories
o Staff costs – 8 categories;
o Marketing costs – 5 categories;
o Admin expenses – 15 categories;
o Fixed assets – 5 categories;
o Borrowings – 3 facilities
– Apart from projecting revenue and costs the tool includes the possibility to model receivables and payables, fixed assets, borrowings, dividends and corporate tax;
– Business name, currency, starting projection period are fully customisable;
– Revenue, cost and fixed asset descriptions are fully customisable;
– The model included an integrated discounted cash flow valuation using the projected cash flow outputs;
– The model includes instructions, line item explanations, checks and input validations to help ensure input fields are populated accurately;
– The model includes a checks dashboard that summarises all the checks included in the various tabs making it easier to identify any errors.
If you require any be-spoke modifications to the tool, we are more than happy to assist with this. Please contact us on: [email protected]
We are a small team of financial modelling professionals with experience working in big 4 business modelling teams and strong experience supporting businesses with their financial planning and decision support needs. Our aim is to provide robust and easy-to-use tools that follow good practice financial modelling guidelines and assist individuals and businesses with common financial planning and analysis processes.
We are keen to make sure our customers are satisfied with the tools / models they purchase and will be more than happy to assist with any questions or support required following or in advance of purchase.
We are also always keen to receive feedback so please do let us know what you think of our models by sending us a message or submitting a review.