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 IT / Tech service provider generating revenue by providing recurring and one-off IT/Tech services to customers and selling IT/Tech products.
 
The model allows the user to model up to 20 categories of IT/Tech services split into recurring and one-off each with their own mix of direct staff and direct expense requirements. The model also allows the user to model revenue and cost of sales from sale of IT/Tech products. Apart from revenue and direct costs, the model allows the user to model direct staff utilisation, indirect staff costs, marketing costs, other administrative costs, fixed assets, inventories, receivables/payables, borrowings, sales tax impacts, corporate tax and dividend distributions.
 
The model follows good practice financial modelling principles and includes instructions, line item explanations, checks and input validations and incorporates a discounted cash flow valuation calculation using the projected cash flows.
 
 
KEY OUTPUTS
 
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:
Summarised projected Income Statement and Balance Sheet;
Compounded Annual Growth Rate (CAGR) for each summarised income statement and balance sheet line item;
List of key ratios including average revenue growth, average profit margins, average return on assets and equity and average Debt to Equity ratio;
Bar charts summarising income statement and balance sheet projections;
Revenue and gross profit by service category and volume of services offered over time presented in a table chart formats
Revenue and gross profit by product category presented in table and chart formats.
Charts and graphs showing: cash balance by month, free cash flow generation, cash flow statement breakdown, profit margins, income statement breakdown, net cash vs net income, working capital, valuation and capital structure.
Discounted cash flow valuation using the projected cash flow output.
Breakeven analysis
 
 
KEY INPUTS
 
Setup Inputs:
Name of business;
Currency;
First projection year and month;
Naming for service categories, product categories, (in)direct staff, direct materials, direct expenses, marketing costs, staff costs, admin costs, fixed assets and borrowings;
Sales tax applicability for services, products, direct costs, and other expenses and fixed assets.
 
Actuals Inputs:
Opening balance sheet (for existing businesses);
Income Statement actuals (for trend analysis);
 
Projection Inputs:
Service revenue inputs including volume of services, rate per service, direct staff hours per service and assumptions on settlement of sales receipts;
Product revenue including purchase quantity, cost price, markup, safety stock percentage and assumptions on settlement of sales receipts and purchase payments;
Direct expense inputs including direct expense per service;
Staff cost inputs including staff numbers, working hours, average salary per full time position, average employer’s social security percentage of salary, average annual bonus and bonus payment months.
Other costs inputs including 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).
 
 
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_Dashboard’ and ‘o_DCF’.
 
 
 
KEY FEATURES
 
Other key features of this model include the following:
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 as forecast periods become actual period;
Timeline is split on a monthly basis and summarised on an annual basis; 
The model allows the user to model up to 20 separate service categories and 10 product categories with their own unique direct cost setup;
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 reduce risk of formula inconsistencies;
The model allows for the following number of underlying categories for each line item (these can be easily expanded if required):
services – 20 categories split into recurring and one-off services;
products – 10 categories;
Staff costs – 5 direct categories and 5 non-direct categories;
Direct expenses – 5 categories;
Marketing costs – 5 categories;
Other expenses – 15 categories;
Fixed assets – 5 categories;
Borrowings – 3 facilities
Apart from projecting revenue and costs the model includes the possibility to model receivables and payables, fixed assets, borrowings, dividends and corporate tax;
Business name, currency, starting projection period 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;
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. 
 
 
MODIFICATIONS & SUPPORT
 
If you require any be-spoke modifications or support, we are more than happy to assist. Please send us a message below or contact us on hello@useprojectify.com