The Settings Sheet

General Settings

Company Name

Default Value: [Company Name]

This field will update the company name across all pages in the financial model.

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Currency

Default Value: USD

You can use symbols or letters to define a currency on the model. Most of the sheets, including Revenue, SG&A, Staff, COGS, and CAPEX, have a 'Currency' column that is linked to this cell. As a general good practice, you should format numbers for accounting, and not for currency.

Model Start Date

Default Value: 1/1/2024

This settings defines the initial month for the entirety of the financial model. Our financial model supports up to 84 months (7 years) from this start date.

This value is linked to cell D6 on the FS-Month sheet, which then uses an EDATE formula to increase the month value by one in every subsequent column. The calendar month section in every other page on the financial model is referenced from here.

We only support starting the model in calendar years. We use a Data Validation dropdown to limit the input values to the start of calendar years. If you need a year that's different from the list available, you can edit it from the Data Validation settings on the spreadsheet.

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Company History

Invested Capital before [Model Start Date]

Default Value: 0

This field is for recording the total amount of capital that has been invested in the company prior to the start date of the model. It includes all forms of investments such as equity, loans, or any other capital injections.

This figure will affect the Owner's Equity > Contributed Capital (Funding Rounds) line on the Balance Sheet section of the FS-Month sheet, at the start of the financial model.

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Available Cash Balance on [Model Start Date]

Default Value: 0

Here, you should enter the total cash available to the company as of the start date of the model. This amount reflects the liquidity position of the company at the beginning of the financial projections.  

This figure will affect the Cash Flow Statement > Starting Cash Balance line on the Balance Sheet section of the FS-Month sheet, at the start of the financial model.

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VAT/Sales Tax Owed before  [Model Start Date]

Default Value: 0

This represents the total Sales Tax, or Value-Added Tax (VAT) liabilities accumulated by the company up until the start date of the model.

It will be reflected in Liabilities on the Balance Sheet.

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Income Taxes Owed before [Model Start Date]

Default Value: 0

Enter the total amount of income taxes owed by the company before the start date. This figure should include all pending income tax liabilities.  

It will be reflected in Liabilities on the Balance Sheet.

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In order to keep the Balance Sheet balanced, the Liabilities and expenses from previous years will be adjusted using the 'Retained Earnings' line on the Owner's Equity section of the balance sheet.

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Taxes

The Taxes section of the Slidebean Financial Model Template is a crucial component for accurately projecting your company's tax liabilities and understanding its fiscal responsibilities. This section is divided into two main parts: Corporate/Income Tax and VAT and Sales Tax. Each part is designed to capture specific tax-related data relevant to your business operations.

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Understanding Sales Tax vs VAT

Sales Tax is a consumption tax imposed by the government on the sale of goods and services. When a customer purchases a product or service, the sales tax is added to the sales price. Here are some key points about Sales Tax:

• Point of Sale Collection: It is typically collected by the retailer at the point of sale and then passed on to the government.
• Varies by Location: The rate can vary significantly depending on the state, county, or city where the business operates.
• Direct Tax on Consumers: Ultimately, it is a tax paid by the end consumer, making it a direct tax on consumer expenditure.

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VAT is a tax on the value added to goods and services at each stage of production or distribution. It is more complex than sales tax and has a different mechanism. Here’s how it works:

• Charged at Each Stage: VAT is applied at each stage of the supply chain, from production to the point of sale.
• Credit Mechanism: Businesses charge VAT on their sales (output VAT) and are charged VAT on their purchases (input VAT). They can claim a credit for the VAT paid on inputs, paying the government only the difference between output and input VAT.
• Inclusive in Price: Unlike sales tax, VAT is usually included in the price of goods and services; the end consumer may not always see it as a separate charge.

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Corporate/Income Tax Inputs

Income Tax Rate (%)

Default Value: 21%

Here you enter the corporate or income tax rate applicable to your business, expressed as a percentage. This rate is used to calculate the income tax liabilities based on your company's taxable income.

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Start of Fiscal Year (month)

Default Value: 1 (January)

This field specifies the starting month of your company’s fiscal year. The default setting is January (month 1), but it can be adjusted to align with your company’s specific fiscal year start.

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Tax Consolidation Month (month)

Default Value: 4 (April)

Indicates the month when income tax payments are due, and when the model estimates they will be paid.

Regardless of when taxes are due, month-to-month tax Liabilities are estimated on the Taxes sheet and recorded as a Liability under 'Income Taxes Payable - Current FY'. At the end of the fiscal year, taxes are transferred to the 'Income Taxes Payable - Past FY' line.

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Partial Income Tax Payments

Default Value: Disabled

This option allows for the inclusion of quarterly income tax payments. By default, it is set to 'Disabled', but it can be enabled and adjusted as per your company's tax payment plan.

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VAT and Sales Tax Inputs

VAT/Sales Tax Rate for Revenue Sources 1-4 (%)

Default Value: 0%

Here you enter the corporate or income tax rate applicable to your business, expressed as a percentage. This rate is used to calculate the income tax liabilities based on your company's taxable income.

Sales Taxes are NOT considered part of revenue, and instead, are added to the Cash Flow statement and the Balance Sheet (as Liabilities) until they are paid.

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VAT/Sales Tax Payment Frequency

Default Value: Last Month ‍

The model will automatically estimate applicable VAT/Sales Tax payments based on revenue. As a general accounting practice, collected Sales Tax/VAT is not considered part of revenue, but rather a cash flow that is collected and then must be paid to the tax authority.

The VAT/Sales Tax liability is accounted for on each month in the model. The model then assumes a payment/closure of the tax liabilities for 'Last Month', last 'Last Quarter' or 'Last Fiscal Year'.

Additionally, the model allows you to enter manual payments directly on the Taxes sheet.

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VAT Payment SG&A/COGS

Default Value: 0%

If you operate in a country with VAT, our model lets you included an assumed VAT paid for each COGS and SG&A line, with the exception of Payroll. VAT payments are then used to offset the VAT collected.

The model assumes the SG&A and COGS expenses added to the model are inclusive of VAT, and then estimates the VAT paid for that line.

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More detail on how this works can be found on the Taxes article.

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Charts and KPIs

The "CHARTS & KPIs" section plays a critical role in organizing and presenting key financial data. This section includes a range of spending categories, each designated for specific types of expenses. These categories are essential for the comprehensive tracking and reporting of the company's financial activities.

These spending categories are integrated with the Data Inputs and the Dashboard sheets. They facilitate the generation of detailed spending reports for the financial model. Moreover, this categorization is particularly useful when creating a 'use of funds' page in a pitch deck, allowing potential investors to clearly understand how the business allocates its resources across different operational areas.

For more information about how these spending categories are used in the broader context of the financial model, you can refer to the articles on the Data Inputs and the Dashboard sheets.

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Spending Category 1: Growth

Default Value: Growth

This category typically includes expenses related to marketing, advertising, and sales efforts. It's designed to track investments made in activities that directly contribute to the company's growth.

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Spending Category 2: Ops

Default Value: Ops

Short for "Operations", this category encompasses costs associated with the day-to-day operations of the business. This may include office expenses, utilities, and administrative costs.

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Spending Category 3: R&D

Default Value: R&D

Standing for "Research and Development", this category is allocated for expenses related to the development of new products or services, and improvements to existing offerings.

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Spending Category 4: Legal

Default Value: Legal

This category covers expenses related to legal services, such as attorney fees, legal consultations, and any costs associated with intellectual property rights and patents.

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Spending Category 5-7: Other

Default Value: Other

Explainer: Flexible categories intended for additional expenses that don't fit neatly into the other predefined categories.

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Valuation

The VALUATION section in the Slidebean Financial Model is a crucial component for businesses aiming to estimate their potential value based on financial projections. It uses a simplified approach based on the Discounted Cash Flow (DCF) method. The business valuation based on existing assumptions can be viewed on the FS-Annual sheet.

Here’s an overview of the key elements in this section:

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Terminal Business Value

Default Value: USD 42,000,000

This figure represents the estimated acquisition price for the company at the end of the projection period. It assumes the company is sold at the end of the seventh year in the financial model. With this input, plus the available cash flow to the business at that time, a discounted cash flow valuation is estimated.

Terminal Business Value connects to the Exit Scenarios Sheet to estimate the returns per share for the founders and investors.

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Discount Rate (WACC)

Default Value: 11.79%

WACC, or Weighted Average Cost of Capital, is used as the discount rate in this model. It represents the company’s cost of capital, accounting for the risk associated with its specific business and financial structure. The discount rate is crucial in the DCF model as it impacts the present value of future cash flows. A higher rate typically indicates a higher risk and consequently lowers the present value of the company.

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Important Note on Valuation‍

It's vital to understand that the valuation provided by this model is an estimation based on the financial projections input by the user. It is not intended to serve as an official appraisal or assessment of the current valuation of the company. The model's purpose is to offer a ballpark figure that can help in strategic planning and decision-making.

For businesses seeking an official valuation, especially for regulatory or investment purposes, it is recommended to obtain a certified 409A Valuation. A 409A Valuation is a formal report that provides a defensible valuation of a private company's common stock, ensuring compliance with IRS regulations and protecting against potential tax penalties. Our team can assist with this.

In summary, the VALUATION section of the Slidebean Financial Model provides an accessible tool for businesses to approximate their value, while emphasizing the importance of seeking professional valuation services for official purposes. You can learn more about WACC here.

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