Financial modeling is one of the key analytical techniques applied by members of the finance discipline, which involves preparing projections of future revenues, costs, and cash flows for an organization. Financial models are created by designing an Excel model that enables the user to input assumptions into the model and the model calculates the output. It is particularly useful to have a good template to start with to save time and ensure that the models can be easily tweaked in the future to be more flexible. In this article, we will highlight the seven most effective financial Modeling Templates that are free to use on the internet.
Contents
1. Simple Valuation Model
It is a very fundamental model template in Excel that can be used for learning the different elements and aspects of DCF modeling. It helps you input future revenue growth rates, profit margins, or capital expenditures to estimate a company’s Unlevered Free Cash Flows. It then applies a discount rate to these cash flows to conclude enterprise and equity value. This template has a good level of detail to explain the basics of modeling as you can see below. It guarantees that the model does not become cumbersome and complex since you are comparing things, which are usually simple.
2. Integrated Financial Statement Model
This financial statement link enables one to connect three significant financial statements, namely the income statement, the balance sheet, and the cash flow statement. It is possible to enter key assumptions in the summary section, for example, on the expected revenue increase, unit costs, and SG&A expenses. These drivers are then applied in the model to predict the integrated financial statements for the coming ten years. This way you can assess all the impacts within the three statements of financial position, operation, and cash flow at once. It also contains features for sensitivities, debt pay-down analysis, and valuation analysis.
3. Merger Model
M&A transactions involve the use of special merger models to evaluate the accretion/dilution effects brought by a deal. It helps you to have a comprehensive look at a transaction, as it shows the model of the merger from the buyer’s and the seller’s points of view. Accompanying outputs are accretion or dilution analysis, balance sheet implications, and the sources and use table. It’s a good template to be introduced to merger consequences and to produce presentations about them.
4. Real Estate Model
Some of these include the following: Real estate financial modeling needs a unique set of assumptions and schedules. This real estate model has a list of assumptions schedules created for construction costs, lease rolls, debt paydowns, and/or sale proceeds. These feed into an automated model that gives unleveled and leveraged returns over the next 15 years. The model is suitable for development projects or where you are holding investments for a long period. This can be used by professionals in the real estate industry to prepare underwriting and acquisitions of properties or new projects.
5. Private Equity LBO Model
Leveraged buyout models are used by private equity firms in assessing leveraged buyout offers. This LBO model helps to evaluate a complete range of debt for a leveraged buyout and gives an idea about the interest cost to be borne by the firm. It embraces initial debt sourcing and subsequent repayments of obligations as debt funding. The model also covers the five-year operation forecast in addition to the value creation assessment. This template enables you to get a feel of how an LBO deal works and is helpful for investment banking, private equity, and corporate development activity.
6. Startup Model
To analyze an early-stage startup venture, one has to make all the assumptions at the model’s base. This presupposes a startup model that enables you to create projections based on the core operating figures. You can pro forma out users, pricing cohorts, and usage rates to extrapolate total revenue, cost of goods sold, operating expenses, line of credit, and even cash balance necessary to compile a complete income statement, balance sheet, and statement of cash flows for a start-up. The model is suitable for all internet and mobile services businesses that sell through an online and/or mobile platform. Overall, thanks to this template I got an idea of how modeling dynamically growing users and revenues works.
7. Financial Dashboard
Summary A financial model consolidates all the financial outputs of a company into one Excel sheet of a financial dashboard. It reveals sales, net income, gross and operating margins, average annual growth rates, ROA, current and quick ratios, debt and equity ratios, and cash flows from operations, investing, and financing activities. The dashboard then accesses the rest of the model by extracting data from the other components and then displaying it in summary format in the form of charts and graphs. This template enables you to give a brief of what a model focuses on within the summary area in a format that is presentable.
Conclusion
There is no better resource than templates since it will help one start any financial modeling project. The following are the seven free refined financial modeling templates that are currently available online across categories. No matter what type of valuation model you are going to build the free template below will come in handy, be it DCF valuation, LBO, startup, or real estate. It causes the built-in presumptions and the automation that supports the construction of a model. These spreadsheets are useful for any entry to mid-level financial analysts. When you have a strong basis for such models, then you can see that even these mechanisms are not as complicated as they may appear to be.
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