PURPOSE OF MODEL
Highly versatile and user-friendly Excel model for the preparation a of 5-year rolling 3 statement (Income Statement, Balance Sheet and Cash flow Statement) financial projection with a monthly timeline for a startup or existing recycling business generating revenue through the acquisition and sale of recycling material.
The model allows the user to model the acquisition and sale of up to 10 different types of recycling materials (can be extended). Direct costs include acquisition costs, direct labour costs (up to 10 categories) and direct expenses with functionality to model inventories, allocate expenses to recycling materials and calculate profit by recycling material.
The key outputs include:
– Projected full financial statements (Income Statement, Balance Sheet and Cash flow 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;
– Volume units (e.g. kgs or tonnes)
– Naming for recycling materials, direct labour, direct expenses, other variable costs, admin staff costs, admin costs and fixed assets;
– Sales tax applicability for recycling material, direct materials, variable costs, other expenses and fixed assets.
– Opening balance sheet (for existing businesses);
– Income Statement actuals (for trend analysis);
– Acquisition costs including volume acquired, cost of acquisition per unit, wastage percentage and average credit terms received
– Revenue inputs including sales volume, sales prices, average credit terms offered
– Direct labour inputs include labour hours per product, current number of FTEs, annual cost per FTE, working days per year and production hours per day.
– Direct expense inputs include amount per year or month and allocation percentages across recycling materials;
– Variable cost inputs including percentage of revenue applicable to and cost percentage of revenue;
– Other costs inputs including admin 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’.
Other key features of this model include the following:
– The model follows good practice financial modelling 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;
– Timeline is split on a monthly basis and summarised on an annual basis;
– The model allows the user to model up to 10 separate recycling materials with their own unique combinations of acquisition costs, direct labour usage and direct expense allocation;
– The model is not password protected and can be modified as required following download;
– The model is reviewed using specialised model audit software to help ensure formula consistency and reduce risk of errors;
– 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 and volume units 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;