Digital Media Business Financial Projection 3 Statement Model

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 digital media business generating revenue by providing online content on a subscription basis and also through advertising.

The model allows the user to model up to 5 different subscription plans to view online content with monthly, quarterly or annual subscription periods for each plan. The model also allows the user to model advertising revenue generated from both number of impressions and clicks, as well as 5 additional categories for any other income. Apart from revenue, the model allows the user to model direct and non-direct staff costs, direct expenses, marketing costs, other administrative costs, fixed assets, deferred income, sales tax impacts, corporate tax borrowings, equity additions and dividend distributions.

The model follows good practice financial modelling 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 Cash flow 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, total subscribers per month and total website traffic.


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;
- Naming for subscription plans, other income categories, direct expense categories, staff cost categories, marketing cost categories, other expense categories, fixed asset categories 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:
- Subscription Revenue
o New subscribers;
o Free trial to paid user conversion rate;
o Monthly, annual, quarterly subscription plan mix;
o Renewal rates;
o Subscription prices.
- Advertisement Revenue:
o Website traffic;
o Average session duration;
o Advert impressions per minute;
o Click-through rate;
o Rate per Mille Impressions;
o Rate per Click.
- Other income:
o Volume of units;
o Price per unit.
- Staff Costs including:
o Staff numbers;
o Average Annual cost per staff member;
o Average employer’s payroll taxes as % of salary;
o Average annual bonus;
o Average healthcare benefits per staff member;
- Other cost inputs including
o Direct expenses;
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 addition 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_Dashboard’ 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 modelling 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 period 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: direct 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 Subscription plans – 5 plans;
o Advert revenue categories – 2 (Impressions and clicks);
o Other income – 5 categories;
o Direct Expenses – 5 categories;
o Staff costs – 10 categories (5 direct, 5 non-direct);
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 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 customisable;
- Revenue, cost, fixed asset and borrowing category descriptions are fully customisable;
- 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 private message or contact us on: [email protected]


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 always 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.