Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
  • Shipping Vessel's Financial Model
Originally published: 08/05/2019 16:22
Last version published: 09/09/2019 11:33
Publication number: ELQ-79168-4
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Shipping Vessel's Financial Model

The model presents the case of the purchase of two vessels with the intent of chartering them to generate revenues.

Description
Shipping Vessel's Financial Model presents the business case of the purchase of two vessels with the intent of chartering them to generate revenues. The model generates the three financial statements as well as the cash flows and calculates the relevant metrics (Net Present Value, Internal Rate of Return, payback period, cash on cash multiple, enterprise value etc...). The financing options for the project include a standard long term loan as well as an overdraft facility and of course equity funding from investors.

So a quick overview of the model, in the contents tab you can see the structure of the model and by clicking on any of the headlines to be redirected to the relevant worksheet.

On the manual tab you are able to feed the general information for the model such as: project title, responsible, timeline of the model and date and currency conventions.

Additionally there is a description of the color coding of the model in the same tab. Inputs are always depicted with a yellow fill and blue letters, call ups (that is direct links from other cells) are filled in light blue with blue letters while calculations are depicted with white fill and black characters.

There is also a color coding for the various tabs of the model. Yellow tabs are mostly assumptions tabs, grey tabs are calculations tabs, blue tabs are outputs tabs (that is effectively results or graphs) and finally light blue tabs are admin tabs (for example: the cover page, contents and checks).

Guide Tab: this tab helps you to gain a grasp of the main value drivers of the model and understand the critical issues of the business.

Moving on to the Inputs (in yellow whatever can be amended as an assumption): detailed inputs for revenues (vessel characteristics, TCE rates for both handymax and supramax, availability days, and brokerage comission), costs (crew, stores, epairs, maintenance, insurance and administrative), working capital (receivables, payables, and inventory), fixed assets and capex (vessel purchase, dry docks, special surveys), equity financing as well as valuation assumptions (such as discount rates used in the weighted average cost of capital tab or WACC).

In the summary tab you are able to see a high level report with the main metrics and value drivers of the model. It can be readily printed on one page for your convenience.

Calculations: this were all calculations are performed. The revenues from each vessel are calculated based on the available days and whether there is a need for dry docking and deducting the operating costs adjusted for inflation the operating profit is resulting. Based on the assets financed and the gearing of the financing the interest and depreciation are occurring. By using the working capital assumptions the impact of the business cycle is presented. Finally depending on the level of the investment considered the relevant debt financing is calculated (Long term debt and overdraft).

In the Outputs tab: everything is aggregated here into the relevant statements: profit and loss, balance sheet and cash flow.

Moving to the Investment Metrics tab, a valuation is performed by using the free cash flows to the firm and then a series of investment metrics are presented (Net Present Value, Internal Rate of Return, Payback Period, Cash on Cash multiple). Additionally the Debt Service Coverage Ratio and the Loan Life Coverage Ratio are presented.

In the Graphs tab: Various graphs present the investment and operating costs, the revenues per vessel type and the banking ratios (DSCR and LLCR). Then multiple charts present the performance of the project from revenues to bottom line along with debt, assets, working capital and cash flows which results in a valuation on a project basis as well as on an equity basis together with the internal rate of return of the project and payback period metrics.

Checks: A dedicated worksheet that makes sure that everything is working as it should!

Important Notice: Yellow indicates inputs and assumptions that the user is able to change, blue cells are used for called up cells, and white cells with black characters indicates calculation cells.

This Best Practice includes
1 Excel file and 1 PDF

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Discussion feed for Shipping Vessel's Financial Model

The user community and author are here to help. Go ahead!

  • s loo
    am involved into an oil tanker financial biz, can this model be used as One oil tanker case ? or have to be 2 dry bulker investment case ? thank you
    arrow_drop_uparrow_drop_downReply reply
    • Big4WallStreet
      Dear s loo,

      Thank you for reaching out. Yes of course this is possible. In order to achieve this you only need to fill only the data for one vessel and leave the second vessel blank. The only inputs that you would need to change / adapt would be the TCE rates for tankers instead of dry bulk, the operating costs assumptions and the investment amount. So yes this is possible.

      If you need any help with entering the input values you can see our rates below:
      https://www.big4wallstreet.com/pages/contact-for-financial-modeling-services


      Best Regards,

      Big4WallStreet Team
      arrow_drop_uparrow_drop_downReply reply
      • s loo
        thank you for your reply, it looks the price is per hour, I thought is 69 dollars ? it is not ?
        arrow_drop_uparrow_drop_downReply reply
        • Big4WallStreet
          Yes correct the price is 69usd for the template.

          However if you need further amendments to the template model, it will be on an hourly basis.

          Best Regards,

          Big4WallStreet Team
          arrow_drop_uparrow_drop_downReply reply
          • Big4WallStreet
            If you don't need changes to the template or if you can make them on your own, you will just pay for the template at 69 usd. The template is fully unlocked so you can adjust it at will.

            BR

            Big4WallStreet Team
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