Startup or Existing Subscription Business Financial Projection 3 Statement Model

3 statement 5 year rolling financial projection Excel model for a startup or existing business selling subscription content services or products

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PURPOSE OF MODEL

Highly versatile and user-friendly Excel model for the preparation of a rolling 3 statement (Income Statement, Balance Sheet and Cash flow Statement) financial projection for a startup or existing business generating revenue from selling subscription products/services. The model allows the user to model up to 5 different subscription products/services.
The model follows best practice financial modelling principles and includes instructions, line item explanations, checks and input validations.

KEY OUTPUTS

The key outputs include:
– Projected full financial statements (Income Statement, Balance Sheet and Cash flow Statement) presented on a quarterly 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 Chart presenting revenue mix and total users per month
o Gross profit by income source.

KEY INPUTS

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.
Setup Inputs:
– Name of business;
– Currency;
– First projection year and quarter;
– App names, variable costs, staff cost, fixed costs, fixed assets and borrowings;
– Sales tax applicability for revenue and cost categories;

Actuals Inputs:
– Opening balance sheet (for existing businesses);
– Income Statement actuals (for trend analysis);

Projection Inputs:
– Revenue
o New Users;
o Free trial to paid user conversion rate;
o Monthly, annual, quarterly subscription mix;
o Renewal rates;
o Subscription prices.
– Variable Costs including:
o Cost per app sale;
o Annual fees per app;
– Other cost inputs including
o Marketing costs
o Staff costs
o Other costs
– Sales and corporate tax inputs including rate and payment periods;
– Dividend inputs including amount or percentage of retained earnings and frequency;
– Fixed Assets including addition amounts and useful life;
– Borrowings including addition/redemption amounts and interest rate;
– Share Capital additions.

MODEL STRUCTURE

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.

KEY FEATURES

Other key features of this model include the following:
– The model follows best practice financial modelling guidelines and includes instructions, line item explanations, checks and input validations;
– The model is not password protected and can be modified as required following download;
– The model contains a dynamic timeline that allows for a mix of actual and forecast period across a 5-year period allowing projections to be rolled forward from month to month;
– Timeline is split on a monthly basis and summarised on an annual basis;
– Costs are split into: variable and fixed for better driver-based forecasting;
– The model allows for the following number of underlying categories for each line item (these can be easily expanded if required):
o Subscription Products – 5 products;
o Variance costs – 5 categories (1 for each subscription product)
o Staff costs – 8 categories;
o Marketing costs – 5 categories;
o Other expenses – 15 categories;
o Fixed Assets – 5 categories;
o Borrowings – 3 facilities;
– Apart from projecting revenue and costs the model includes the possibility to model inventory, deferred income, payables, fixed assets, borrowings, dividends, corporate tax and sales tax;
– The model included an integrated discounted cash flow valuation using the projected cash flow outputs;
– Business name, currency, starting projection period are fully customisable;
– Revenue, cost, fixed asset and Borrowing category descriptions are fully customisable;
– 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 all the checks included in the various tabs making it easier to identify any errors.

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