- Solutions -

1. Simple Financial Model -

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2. Standard Financial Model -

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3. Custom Financial Model -

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- About Our Financial Models -

Each financial model has a standard layout and can add optional sections

We color code our models to make inputting assumptions easy, blue text on a grey background is a cell that can be edited while black on white is a formula and white on blue is a key output

Dashboard: Taking the outputs of the model and converting them into graphs to visually display your projects financial feasibility

Financial Statements: This is a consolidated 3 part financial statements

Income Statement: Showing the revenue, cost of sales and expenses of the project

Cash Flow Statement: Tracks cash from operating, investing, and financing activities

Balance Sheet: Details assets, equity, and liabilities

Invested Capital: Track when and how much capital is invested

Income: Detailing all revenue streams and how they generate income on a per unit or per user basis. Multiplied by the number of units or users to determine revenue

Cost of Sales: Outlines direct costs related to producing and selling your product or service, excluding salaries which is done separately. For example, server costs as a cost per new user uploaded, or the cost of manufacturing and shipping a product.

OpEx: All of the costs related to running the project, we break this up into 3 distinct sections:

Marketing: How you will spend money to attract customers or users and how many customers or users you will have attracted for the spend to use on the revenue calculation

Operations: General expenses like rent, utilities and maintenance which are an periodically increasing cost, or subscriptions which is a spend per staff member, or bank fees which could be calculated by a percentage of cash flow through your bank account.

Salaries: A list employee compensation details, showing when they start, what their salary is and allocating their value to a cost center between admin, cost of sales, product development and marketing

Tax: Providing for your tax obligations and payments impact profitability and cashflow

CapEx: Purchases of assets can be broken up into multiple sections

Product development: Third party product development spend can be split into either operational spend or capitalized as an asset depending on the nature of the development, also salaries can be split in the same way if the product under development can be classified as having its own value independent of your operations

Fixed Assets: Physical assets such as IT Equipment, desks and chairs, vehicles, machinery, and land and buildings the project owns, it is important to account for the depreciation of fixed assets in the Profit and Loss Statement

Acquisitions: Purchasing intellectual property or other entities to advance your project

Optional sections

Working Capital: The timing of when cash changes hands and the purchase of inventory in advance will determine how much free cash is available for operations at any point in time

Inventory: Buying stock in advance for resale is determined by a combination of factors like minimum order quantities and shipping time, knowing how much inventory to keep on hand will impact the working capital of the project

Credit Facilities: Having access to credit when cash runs low is one way to ensure the working capital needs do not cause a project to fail, calculating the timing on receiving credit, the interest and repayments will impact cash flow

Key Performance Indicators (KPIs):

Many KPI’s will be specific to your project but some general ones include:

Revenue Per Unit/User: How much revenue each new user or unit generates for the project

Gross Profit Margin: What percentage of your revenue is left after the cost of purchasing or providing your product or service

Customer Acquisition Cost (CAC): What does it cost you to acquire 1 new user

Lifetime Value (LTV): How much will you make from 1 new user in their paying lifetime

CAC to LTV: The ratio of CAC to LTV shows the effective return on marketing spend

EBITDA: Earnings before interest, taxation, depreciation, and Amortization is the sum of gross profit minus operational expenses

Net Profit: Net Profit is the remaining balance after everything above is taken into account and dividing that by revenue will give you the Net Profit Margin of the project

Free Cash: How much cash is in the bank

Debt to Assets and Debt to Equity Ratios: Measures the credit health of the project

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- Examples -

- Our Process -

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Step 1: Initial Consultation

Understand your business, goals, and needs to tailor the financial model.

Step 2: Data Gathering

Collect essential data such as historical financials, market analysis, and business plans.

Step 3: Model Development

Develop a customized financial model incorporating various valuation methods and detailed forecasts.

Step 4: Review and Feedback

Present the model for your feedback to ensure alignment with your business expectations.

Step 5: Finalization

Finalize the model, including financial statements, valuation analysis, and a cap table, with full transparency on methodologies used.

Wrap Up and Deliver

Conclude with a final call and deliver the ready-to-use financial model for decision-making and presentations.

- Typical Charts for Pitch Decks -

The Ask Slide

The ask slide is the reason you built the pitch deck, to ask an investor to invest in your project, it is important to be clear on how much you are asking for and what you will do with the funds, typically over a 24 month period but this can be customized

Waterfall Chart

Money In

Capital Raised (This includes the current ask as well as any other ask in the period)

Revenue

This can also include loans and other types of income

Money Out

Cost of Goods Sold (COGS)

Marketing Expenses

Overheads

Product Development

Cash in Hand

Other categories can be added as needed like inventory, fixed assets and working capital

Pie Chart

This is a different view of the same information on the money out

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The 24 Month Forecast Slide

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The 24 Month Forecast graph shows a forecast of 24 months of your project

Capital Raise: A column represents the capital raised in the month it occurs, in this example in month 1 for 1.5M

Cash at the End of the Period: A dotted line representing the cash position of the project runs the full period, it is important to keep the cash position above 0, though loans, additional capital or by breaking even, in this example the break even point is where the cash reaches its lowest position and turns around in month 18, with the lowest cash position being 0.19M

Additional lines showing a combination of useful metrics can be added, typically this includes:

Revenue: To show when revenue generating activities start, how quickly they grow, and what proportion it it to the other items in the chart, some projects may show gross profit instead of revenue, or show both revenue and cost of sales

Operating Expenses: Tracking the operating expenses can show how you operational overheads grow over time

EBITDA: Will track the operational break even of the business, which does not always coincide with the cash break even

The Unit Economics Slide

The unit economics chart is a bit more complicated, it shows the percentage spend on each additional sale made or user acquired not including marketing over the 24 month period, this shows what the money earned will be spent on and how as costs decrease over time in proportion to the number of sales the project reaches break even, in this example in month 19

The table outlines some additional relevant information on the number of sales or users, the customer acquisition cost and the return on marketing spend that are not shown in the graph but part of how the data is compiled.

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- Reviews -

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