Background

The Africa based company is providing digital payment solutions for the African populations. Although this concept is not new for the world in Africa it is breaking the traditional norms. They are not only providing digital transfer for local currency but also assisting in currency conversion specially for USD to local currency. Along with that, they are providing insurance to clients as well, which is another revenue model.

Problem

This firm was growing well as their subscription increases day by day. Now planning to get external investment from an investor to reach out to more people. For that purpose, they require a business proposal and financial model that represent the company’s financials and expected future earnings.

Solutions

Oak Business became the advisor in this project for financial model and evaluation. The critical part is to analyze the market size as there was no research available before. Based on the market research we built a financial model with the following services.

Input Assumptions

We built input assumptions of investment, followed by Assets, and operating expenses so that we can forecast the expected revenue. A company like this, increase the variable cost as the transaction increase, like support cost (No. of employees increase when no. of transactions increase. We took the expenses and revenue growth based on the prior data of the company.

Revenue Forecast

In the first section of the income statement, we forecasted the no. of subscribers sign up, along with that, we analyze the churn rate of customers who are not doing any activity after signing up. After analyzing the no. of customers, we projected the revenue. This company has multiple revenue models. We calculated the income for each model separately based on the no. of subscribers. After compiling the revenue and expenses, we calculated the monthly and yearly income statements.

Depreciation and Amortization

Oak Business Consultant prepared the depreciation schedule because this project requires a significant investment in data security and safety measures.

Cash Flow Statement

We built cash flow analysis, which was linked with Income Statement, input assumptions in a way so that there was no need to add in the sheet, and sheet change instantly.

Balance Sheet

Then we build a third and last financial statement, i.e., Balance sheet, which was also linked with Input sheets and cash flow.

Break-Even Point

Every business has to know its breakeven point. It helps investors and entrepreneurs to set the mark so that they can put extra effort to cross this point.

Dashboard

Graphs speak more than numbers because it helps both the investor or Entrepreneur to see the graphical representation of the projection. We provide the following graphs in the dashboard sheet

Project Evaluations

Being an Investor, you always want the comparison of the equity against the investment. So, we helped them to determine the company’s worth based on his future earnings. We provided them discount cash flow, NPV, IRR, or free cash flow; also, we provide an analysis of Investment vs equity comparison as well.

Sensitivity Analysis

When the business is in the initial stage, it is stuff to predict the actual market or scenario when the company do lots of marketing. So we did a sensitivity analysis for a client, having 3 kinds of situation for sales, i.e. Low, Moderate and optimistic and analyzed the outcome in different circumstances. It really helps the client to gain knowledge of what if a business could not achieve their sales target or provide.

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