Case Study- Financial Model and Projection for Eco-Resort Company
Background
The case study represents how Oak business consultant understands clients’ requirements and what processes and strategies we applied to solve those problems to maximize client satisfaction.
Our client’s company creates Eco Destinations, Wellness Retreat Centres and Eco resorts. The company also provides worldwide clients with geo-design and bio-dynamic Design/Build Consulting services. Due to the large potential and demand in the future, the company has decided to expand and acquire properties with potential ECO tourism. The client wanted to raise initial investment to acquire 3 eco-resort properties in Vanuatu. The aim of the model was to get a clear picture of future projections of the eco-resort property that the client wishes to buy. And also to analyze the company’s worth to get potential investors on board to be a part of the eco-sustainable community.
Requirements
- Financial projections for the eco-resort property the client intends to buy and operate.
- Company valuation based on the eco-resort property financial projections.
Solutions
- Providing the required and best output is impossible without a complete understanding of the client’s requirements. Therefore, we scheduled meetings with the client to understand the client’s requirements. After competing to understand the client’s requirements, we started the project.
- We researched the eco-tourism industry, the revenue structure and the cost associated with the particular services the client will provide in the property.
- We created detailed revenue analysis, financial projections and company valuation.
Financials
- Revenue Analysis
Our Experts created a sales forecast and revenue tab where we highlighted the input cells which the client can alter. We mentioned all the revenue categories in the revenue tab while forecasting for the next five years. The revenue analysis sheet shows that the eco-resort company will earn most of the revenue from accommodation, followed by wellness activities and weddings.
- Income Statement
We calculated the income statement through linked formulas. It showed that the company would have a profit in the first year of operations. Moreover, by the end of year 5, the net profit margin would be 59%.
- Balance Sheet
The balance sheet shows the company’s position. And as per the projections, the company will have a good financial situation in the next five years.
- Project Evaluation
We calculated the NPV of the company. It showed that the company has a solid financial position with an IRR of 23%.
Conclusion
The client wanted to buy properties and know the future projection and company valuation. Thus, we delivered the financial model, including the required calculation. As per the projections, our client’s eco-resort company will earn most of the revenue from the accommodation, followed by wellness activities and weddings. Therefore, the company will be profitable from the start year of operations.
Oak Business Consultant provides financial business consulting services for SMEs and Small Business Owners, including Accountancy, Bookkeeping, Financial Planning, and more. Moreover, we help them to raise startup funds, develop budgets easily, and track performance on an easy-to-use financial Model with a Dashboard. Our main goal is to provide the best possible solutions to each and every client. We create a timeline once the project is approved and share it with the client so that the client can know when we will deliver the deliverables. In addition, we ensure that the client is regularly informed about the progress of the project to maintain alignment. Following the project’s completion, we gather feedback from our clients to enhance and improve our services.
