Investment Options Comparison Financial Model
Originally published: 13/11/2018 13:18
Last version published: 19/03/2021 08:13
Publication number: ELQ-93328-3
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Investment Options Comparison Financial Model

An effective financial tool that assists the user in making a comparison of investment options.

This investment options comparison tool from Mahender Kumar enables the user to efficiently construct an assessment of different investment opportunities, in order to verify which will be the most fruitful.

The Excel financial model is separated into 8 functional tabs, and they operate on an A, B, A, B basis. The indicators are as follows:

- Assumptions

- Graphs
The graphs are an excellent provision. They offer a clear and professional presentation of the data. There are two sets of graphs produced: Revenue and Number of Rounds, and Gross Profit and EBITDA. There is one produced for each investment option – Scenario A or B.

- Revenue & COGS (Cost of Goods Sold) (A), then (B)
Including: detailed revenue, detailed base COGS, detailed production labour costs, and detailed production overheads – a 60 month forecast

- P & L (Profit & Loss) (A), then (B)
Including: the aforementioned Revenue and COGS inputs, their total costs, and then as a percentage of Revenue. Operating expenses (labour, overhead and shared services), and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization).

- Valuation (A), then (B)
Provides the NPV (Net Present Value) and Discount Rate, allowing for an ultimately simple comparison of the two investment options.

This comprehensive financial model will provide clarity when deciding between two seperate investment opportunities.

This Best Practice includes
1 Excel Spreadsheet

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