Product Based Financial Model

The product based financial model is a tool which enables a business to identify products/project deliverables and risks to be estimated in a cost effective way that make up or contribute to delivering the objectives of the business, and the associated work required to deliver them.

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A product-based financial model is a tool that enables a business to identify products/project deliverables and risks to be estimated in a cost-effective way that makes up or contributes to delivering the objectives of the business and the associated work required to deliver them. This financial model is about creating a representation of your business/start-up’s financial situation. It can be used across all industries for capital budgeting, estimating costs associated with running a particular business, and projecting profits. It has a “Summary” part where you must type in information about your business, and the rest will be automatically calculated.

Other parts of the model include the following;

Investor summary – which shows a summary of your investment and earnings, NPV, and IRR.

Income statement – shows the company’s revenues and expenses during a particular period. It indicates how the revenues are transformed into net income or net profit.

Cash flow statement – shows how changes in balance sheet accounts and income affect cash and cash equivalents and break the analysis down to operating, investing, and financing activities.

Balance sheet – which reports a company’s assets, liabilities, and shareholder’s equity at a specific point in time and provides a basis for computing rates of return and evaluating its capital structure.

Loan amortization – which shows calculations of how you will pay back a business loan on scheduled periodic payments that are applied to both principal and interest.

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