Financial Model is a spreadsheet of historical numbers structured to form calculations to predict future financial performances. Financial Models are formulated differently for different industries and is used as a decision-making tool to understand how current change will affect the future health of the organization.
Every business is unique and has a unique set of strengths and challenges thus, the financial model cannot be the same for all. A good financial modeler must understand the nitty-gritty of the business and formulate a framework that will help them to take correct business decisions.
Now that the financial model is linked to past performance, it is not always true that history repeats itself therefore only well-researched elements of historical data must be considered to make a forecast model. This requires a good understanding of data analytics, business cycles, economic drivers and industry dependency amongst others.
A good financial model must be dynamic and user friendly so that promoters can easily gain insights into profitability, liquidity, credibility and financial structure of the organization. It must correctly value the business while keeping the scope for sensitivity factors. It should be modeled to understand how a company will perform in different scenarios and make an action-plan accordingly.
StartupMinds consists of a team of developers with hands-on experience in financial modeling. With the combination of Data analyst, Financial Analysts, Research Analysts and Investment Banking Analysts we curate the financial model that is customized for your business and will help you in decision making.
Financial Models are needed for various business disciplines like valuation of new projects, valuation of the business to raise funding, managing working capital, forecasting future inventory requirements, merger, and acquisition strategies or predicting the capital adequacy requirement to manage the financial risk of the business.
What We Do
What We Do
StartupMinds provides a dynamic financial model that is built on realistic and relevant assumptions based on in-depth business insights and develops justifiable financial projections that are customized for each client. Financial Model is a pre-requisite for valuation and is a necessity for even-handed participation in investor’s table. With the team of highly professional and seasoned experts in this field, we build a formula-driven model for the various sectors with a special focus in Food & Beverages, Agri-Tech, Fin-Tech, Clean-Tech and Mobility among others.
Steps involved in formulating comprehensive financial models are:
Historical Analysis: The starting point of a financial model is to analyze the past, identify the Key Performance Indicators and use statistical, financial and analytical skills to select the potential drivers for future predictions
Assumptions: Based on the historical analysis we develop forward-looking assumptions for predicting the future. This assumption sheet comprises clearly labeled variables that can be modified and is further linked to various sheets which makes the model highly dynamic. One only needs to make changes in this sheet to see the eventual effect on forecasted business performance.
Future Projections: We build a comprehensive model consisting of all three financial statements- Cash Flow Statement, Profit and Loss Statement and Balance Sheet supported with Revenue sheet, Operating Cost sheet, Marketing expenses, Human Resources et al. Based on the assumptions we calculate 3 to 5 years forecast model to justify the business valuation.
Business Valuation: We work intensively to calculate a valuation for your business using techniques like Discounted Cash Flow analysis, Comparable Trading Multiples or Precedent transaction modeling so that you seal the deal incorrect terms.
Sensitivity Analysis & Scenario Testing: Sensitivity Analysis maps the changes in the target variables based on changes in independent variables under a given set of assumptions. While Scenario Testing gives us an understanding of how the business will perform given certain assumptions that are best, neutral or worst for the business.
Cap Table: This capitalization table is mostly used by startups and private companies to understand the equity ownership, company’s investors and market value of the company. It can also help you drive insights on potential new sources of funding.
Creative Dashboard: To improve the interpretation of the financial model we also provide a creative dashboard for data visualization. It depicts the all-important parameters in the model using graphs and charts and allows you to take strategic business decisions at a faster pace.