Recycling Business Financial Projection 3 Statement Model
Originally published: 04/05/2021 05:50
Last version published: 08/05/2021 12:29
Publication number: ELQ-93805-2
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Recycling Business Financial Projection 3 Statement Model

User-friendly 3 statement 5 year rolling financial projection Excel model for existing/startup recycling business

Description
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 recycling business generating revenue through the acquisition and sale of recycling material (eg. waste paper, metal, plastic, textiles, electronic equipment etc.)

The model allows the user to model the acquisition and sale of up to 10 different types of recycling materials (can be extended). Direct costs include acquisition costs, direct labour costs (up to 10 categories) and direct expenses with functionality to model inventories, allocate expenses to recycling materials and calculate profit by recycling material.

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

The key outputs include:
- 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:
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 Gross Profit margin by product in table and bar-chart format
- Discounted cash flow valuation using the projected cash flow output.


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 month;
- Volume units (e.g. kgs or tonnes)
- Naming for recycling materials, direct labour, direct expenses, other variable costs, admin staff costs, admin costs and fixed assets;
- Sales tax applicability for recycling material, direct materials, variable costs, other expenses and fixed assets.

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

Projection Inputs:
- Acquisition costs including volume acquired, cost of acquisition per unit, wastage percentage and average credit terms received
- Revenue inputs including sales volume, sales prices, average credit terms offered
- Direct labour inputs include labour hours per product, current number of FTEs, annual cost per FTE, working days per year and production hours per day.
- Direct expense inputs include amount per year or month and allocation percentages across recycling materials;
- Variable cost inputs including percentage of revenue applicable to and cost percentage of revenue;
- Other costs inputs including admin staff costs, 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_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 good practice financial modelling guidelines and includes instructions, line item explanations, checks and input validations;
- 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;
- Timeline is split on a monthly basis and summarised on an annual basis;
- The model allows the user to model up to 10 separate recycling materials with their own unique combinations of acquisition costs, direct labour usage and direct expense allocation;
- 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 ensure formula consistency and reduce risk of errors;
- The model allows for the following number of underlying categories for each line item (these can be easily expanded if required):
o Recycling materials – 10 categories;
o Direct labour costs – 10 categories;
o Direct expenses – 10 categories;
o Other variable costs – 5 categories
o Admin Staff costs – 8 categories;
o Marketing costs – 5 categories;
o Admin expenses – 15 categories;
o Fixed assets – 5 categories;
o Borrowings – 3 facilities
- Apart from projecting revenue and costs the tool includes the possibility to model receivables and payables, fixed assets, borrowings, dividends and corporate tax;
- Business Name, currency, starting projection period and volume units 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

If you require any be-spoke modifications to the tool, we are more than happy to assist with this. Please send us a message through the Eloquens site or contact us on: hello@useprojectify.com


ABOUT PROJECTIFY

We are a small team of financial modelling professionals with experience working in big 4 business modelling teams and strong experience supporting businesses with their financial planning and decision support needs. Our aim is to provide robust and easy-to-use tools that follow good practice financial modelling guidelines and assist individuals and businesses with common financial planning and analysis processes.

We are keen to make sure our customers are satisfied with the tools / models they purchase and will be more than happy to assist with any questions or support required following or in advance of purchase.

We are also keen to receive feedback so please do let us know what you think of our models by sending us a message or submitting a review.

This Best Practice includes
1 Excel Model, 1 PDF example

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Further information

Prepartion of a 5 year 3 statement (Income Statement, Balance Sheet, Cash Flow Statement) Financial Projection Model for a new or existing recycling business

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