Franchise 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 business generating revenue through franchise fees and sales of products to franchisees.


The model allows the user to model up to 15 different franchise arrangements each with their own starting period, franchise fees/royalties, markup on products sold and sales volumes. It also allows the user to model product inventories, payables and receivables, staff costs, admin expenses, borrowings, fixed assets, taxes, dividends and equity movements.


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 Various charts showing performance by franchisee arrangement
- Discounted cash flow valuation using the projected cash flow output.
- Break-even analysis




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;
- Naming for franchise arrangements, product categories, staff costs, admin expenses, fixed assets and borrowing arrangements.
- Sales tax applicability for various revenue and cost items


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


Projection Inputs:
- Franchise arrangement inputs including starting period, initial fee, royalty on sales, mark-up on products sold. Annual service fees, sales volume, average price per unit, credit period offered
- Product inputs including average quantity per unit sold, average cost per unit, safety stock percentage and credit period received.
- Other costs inputs including staff costs, marketing costs and admin expenses;
- 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 15 franchise arrangements each with their own fee structure, sales volume and starting period;
- 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 Franchisee arrangements – 15 arrangements;
o Franchise Product categories – 10 categories;
o 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 fsset 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: [email protected]




ABOUT PROJECTIFY


We are 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.