RegTech Business 5-Year 3 Statement Financial Projection Model

Description
PURPOSE OF MODEL

A Regtech (Regulatory Technology) business leverages technology to help organizations comply with regulatory requirements more efficiently and effectively. These companies typically provide software and services that automate and streamline compliance processes, reduce regulatory risk, and improve transparency.
Our highly versatile and user-friendly Excel model allows for the preparation of 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 RegTech business offering subscription and/or usage-based products.

The model allows the user to model 8 different subscription tiers/products and 8 different usage-based products/tiers together with direct expenses, staff costs, marketing costs, other operating costs, fixed assets, borrowings, sales tax, 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
The key outputs include:
- Projected full financial statements (Income Statement, Balance Sheet and Cash flow Statement) presented on a monthly basis across 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 revenue per customer (ARPU), average profit margins, average return on assets and equity and average debt to equity ratio;
o Tables and Bar charts summarising revenue, direct expenses and user volumes by product;
o 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.
- IRR and NPV
- Breakeven analysis



KEY INPUTS

Setup Inputs:
- Name of business;
- Currency;
- First projection year and month;
- Naming for subscription tiers, Usage-based pricing tiers, direct expenses, staff costs, marketing costs, other operating costs, fixed assets and borrowings;

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

Projection Inputs:
- Subscription-based product assumptions including new subscribers, payment plans (monthly or annual), churn rates, subscription rates and free trial to paid user conversion ratio;
- Usage-based product assumptions including number of users, average usage volumes, minimum usage volumes and rate per unit;
- Direct expenses calculated based on number of active users, number of new users or amount per annum basis.
- Staff cost inputs including staff numbers, 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 other operating 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, interest rate and maturity date;
- 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 periods 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 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):
o Subscription tiers/products – 10 types;
o Usage-based tiers/products – 10 types;
o Direct capital expenses – 5 categories;
o Direct expenses – 10 categories (5 for each subscription and usage-based products);
o Staff costs – 10 categories;
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 fixed assets, borrowings (amortising), 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.



SUPPORT / MODIFICATIONS

We are keen to ensure our customers are satisfied and find the models useful for their financial projection needs. Our models are developed with the user in mind and include instructions, line-item explanations, checks and input validations to ensure they are as user-friendly and easy to use as possible without requiring extensive knowledge of Microsoft Excel, finance or accounting. If any questions do arise, we are more than happy to assist. We are also happy to support with any be-spoke modifications you may require to the models to better suit your business needs. To get in touch, please send us a message through the website

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.



ABOUT PROJECTIFY

We are financial modelling professionals with experience working in big 4 business modelling teams and strong experience supporting businesses with their financial modelling 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 their financial projection and analysis requirements.