Starting or Buying a Coffee Farm – Financial Model

The goal of this model is to assist you with starting or buying a coffee farm. The financial spreadsheet templates assist in analysing and forecasting the financials for a coffee plantation project. The spreadsheet uses a bottom-up approach to estimate lands under management, yields, harvest volumes, prices, revenues, planting costs, growing costs, harvesting and processing costs, operating costs, capital expenditures and other parameters which are used to prepare a financial statement forecast.

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Attention Coffee Farmers! This financial model template for starting or buying a coffee farm allows preparing a 10-year financial forecast for a coffee plantation or similar project the trees are grown for around several years until the grown coffee beans can be harvested and processed annually. The Excel financial model spreadsheet template model prepares a comprehensive financial forecast based on land management and operating model including all three financial statements – Income Statement, Balance Sheet, and Cash Flow Statement. Furthermore, the financial model template includes a debt schedule and calculates the main financial ratios banks and investors may require. For equity investors, the model also calculates the required funding and an investment scenario based on an assumed holding period of up to 10 years. This spreadsheet model template offers a great tool when you aim to understand how the economics of your next coffee plantation project might look like.

Please also refer to this video which explains how the model works:

This Excel spreadsheet model template has a simple structure and contains several worksheets:

Executive Summary

This worksheet contains a financial summary of the projected yearly financials, lands under management, harvest volumes, forecasted prices, financial ratios, yields, cost structure, uses and sources of funds forecasted valuation and the financial metrics. Financial metrics – unlevered and levered – include the, required funding, expected investment multiple until exit, Internal Rate of Return (IRR), Payback period, annual cash on cash yield for equity investors, and the Net Present Value (NPV) of the discounted free cash flows of the project.

Assumptions

A worksheet that contains all assumptions required to prepare the forecast from the point in time when starting or buying a coffee plantation. These are:

  • General assumptions such as currency, volume, and area units (e.g. can be inputted as kg or lbs, hectares or acres, etc.)
  • The inventory of all lands to be owned, rented, or acquired, year of acquisition, and year of planting
  • Yield and coffee price assumptions
  • Assumptions for cost and price inflation rates, interest rates, taxes, days receivables, the depreciation period
  • Direct costs for planting, growing, and harvesting, operating costs (OPEX), capital expenditures (CAPEX)
  • Uses and sources of funds
  • Investment and valuation assumptions such as the Holding Period, Exit Valuation Multiples, the Discount Rate

Lands under Management

Contains the planning schedules for managing up to 20 plots of lands for the coffee farm and calculates for every year of the forecast period the area under management, lands rented and owned, areas planted and areas harvested.

Operating Model

Includes all required calculations to estimate the projected annual harvest volumes of coffee beans, annual revenues, direct costs, operating costs, capital expenditures, and a fixed asset schedule.

Debt Schedule

Includes the schedule for two layers of financial debt and inputs to adjust the drawdown and repayment period of the two debt facilities.

Financials

This worksheet includes the yearly projected financials such as the projected Income Statement, Balance Sheet, Cash Flow Statement, Financial Ratios, a Standardized Income Statement to understand the cost structure, Profit per Hectare (or Acre) analysis, Free Cash Flow calculation for the unlevered and levered free cash flows, funding schedule, and a dividend schedule.

Terms & Abbreviations

A summary of the cell color codes and the terms and abbreviations used in the model.

This financial spreadsheet template can play a key part to better understand how economics will work when buying or starting a coffee farm. The model is built dynamically and also allows you to run a variety of scenarios of what will happen when you change the input assumptions and see the effect on volumes, revenues, costs, profits, and cash flows. The model also allows to simulate the purchase or rent of additional lands and evaluate the impact on the financial results.

The model comes in the form of a report which could also be printed and provided to banks or investors as the basis for their financial analysis decision-making.

If you are a coffee lover and ever wondered what are the economic prospects of launching your own coffee farm this is the Excel spreadsheet model template that can help you to figure out how the economics of your coffee farming project might work out.

This financial model contains a forecast based on yearly financials. In case you need a more detailed monthly forecast (but more complex to build), check out our alternative Coffee Farm Financial Feasibility Model Template which is more detailed and more complex (monthly forecast). In contrast, this Spreadsheet model template (annual forecast only) is simpler and easier to handle.

The Coffee Farming model template comes in the form of two versions, a free PDF Demo version and a fully editable MS Excel spreadsheet template (paid version).

File types:
. xlsx MS Excel
.pdf Adobe Acrobat Reader

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