PURPOSE OF MODEL

Highly versatile and user-friendly Excel model for the preparation of a rolling 3 statement (Income Statement, Balance Sheet, and Cashflow Statement) financial projection for a startup or existing Hotel business generating revenue from developing applications.

The model allows the user to model up to 15 different revenue-generating apps split across the following 3 types:
– Free apps – generating revenue by displaying adverts within the app;
– Subscription apps – users pay a monthly or annual fee to access content, services, or experiences within the app;
– One-time payment apps – users pay once to download the app and use all of its functionality.

The model follows best practice financial modeling 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 Cashflow 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 downloads by month and app across the above 3 app types.
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:
– Free app revenue including:
o Download volume
o Attrition rate
o Usage (sessions per month, minutes per session)
o Ad frequency and pricing
– Subscription app revenue including:
o Download volume;
o Free trial to purchase conversion rate;
o Monthly, annual subscription mix;
o Renewal rates;
o Subscription prices.
– One-time purchase app revenue including:
o Download volume;
o Free trial to purchase conversion rate;
o App 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 additional 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 modeling 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 periods 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 Apps – 15 apps (5 x free, 5 x subscription, and 5 x one-time payment apps);
o Variance costs – 15 categories (1 for each app)
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 customizable;
– Revenue, cost, fixed asset, and Borrowing category descriptions are fully customizable;
– 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 that summarises all the checks included in the various tabs making it easier to identify any errors.

MODIFICATIONS

If you require any bespoke modifications to the tool, we are more than happy to assist with this. Please contact us on: [email protected] for further instructions.