PURPOSE OF TOOL
Highly versatile and user-friendly Excel model for the preparation a of 50-year 3 statement (Income Statement, Balance Sheet and Cash flow Statement) financial projection with a yearly timeline for a startup or existing timber farming business generating revenue through the growing of trees and selling of sawlogs and pulpwood.
The model allows the user to model the production and sale of up to 10 tree plantations and includes variable costs for land lease (if applicable), planting, maintenance, harvesting, processing, and transportation of wood.
The model follows good practice financial modeling principles and includes instructions, line item explanations, checks, and 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 Cash flow Statement) presented on a yearly basis for up to 50 years.
– 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 plantation 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;
– Naming for plantation categories, establishment costs, staff costs, other expenses, fixed assets, and borrowings;
– Sales tax applicability for products, variable costs, other income and expenses, and fixed assets.
– Revenue inputs per plantation including hectares, years to harvest, trees per hectare, pulpwood vs sawlog, average Sawlog Meters and pulpwood kg per Tree, 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 including land lease, planting, maintenance, harvesting, processing, delivery calculated on a per hectare
– Other costs inputs including staff costs, establishment 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 additional amounts and useful life;
– Borrowings including addition/repayments amounts and interest rate;
– Share capital additions;
– Discount rate inputs.
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’ and ‘i_Assump’). 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’.
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 yearly timeline with a mix of actual and forecast periods which be easily rolled forward from one projection period to the next;
– The model allows the user to model up to 10 tree plantation categories with their own unique variable cost 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):
- Plantation categories – 8 categories;
- Variable cost categories – 6 categories;
- Staff costs – 5 categories;
- Establishment costs – 5 categories;
- Other expenses – 15 categories;
- Fixed assets – 10 categories;
- 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 customizable;
– Revenue, cost, fixed asset, and borrowing descriptions are fully customizable;
– 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 which summarises checks in tabs