The phase of project planning is where any project starts, although it can actually occur during project execution. Project Planning is basically series of careful steps and procedure by a project manager or business owner. This guide will serve as the basis of the manager in the long run, determining the right strategies and choices to make.
You first need to identify and describe the needed project plan template google sheets components during the planning process, which eventually form a clear, cohesive document detailing all the project's required tasks. While project plans may vary from one company to another depending on the desired goals, there are certain crucial elements or measures that should be included to create an effective project plan and prevent uncertainty and improvisation. Here are some basic components of a good project plan template google sheets: Project Scope -The project manager will need to explain at what ends the project plan has to cover. This provides a clearer path that will afterward show the target or finished result of the project. If the scope is not specified, it may be extended during the project, resulting in cost increases and deadlines missed. Project Goals -Goals are the outcomes your project wants to achieve and are typically large. The aims and targets naturally emerge from the business plan, but you go into more detail in this point. Objectives and Deliverables -You need to define the outcomes obtainable from the project that has to be particular, measurable and time-bound. The key accomplishments for a project are referred to as milestones and main deliverables are considered the essential job. Both represent the major components of a project's work. Work Breakdown Structure (WBS) –That determines all the tasks necessary to achieve the objectives of the project. The project scope is specified by these activities, showing what operation is included in the project. Even the sequence of project activities is decided by the WBS. Budget - The budget of a project reflects how much cash is allocated to accomplish the work. The project manager is responsible for the effective dispersal of these resources. Schedule - Develop a work schedule focused on the WBS and resources to complete all activities required for achieving deadlines and delivering project deliverables. There are still a lot more other components of a project plan which you can add depending on your desired goals or whatever strategies you would like to implement. In case you do not have the time to develop project plan template google sheets from scratch, there are many pre-made templates you can get online which are powerful and ready to be used?
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Discounted cash flow (DCF) is one of the approaches of business valuation under the income approach. DCF uses a discount rate to derive the net present value of future cash flows. The commonly used discount rate is the Weighted Average Cost of Capital (WACC). Discounted cash flow shows how much should be invested to reach the desired earnings in the future. Many investors used this method as it utilizes the cash flow to predict future returns, which is one of the factors that investors and financial analysts are looked upon when evaluating businesses for possible investment options. However, DCF is a complicated approach and requires a deep understanding of the formula used for this approach. To understand more below is the formula to compute for the Discounted Cash Flow. Discounted Cash Flow Formula and Example The formula is presented in detail with an example below to explain better how the computation in Excel for Discounted Cash Flow works. DCF = CF1/(1+r)1 + CF2/(1+r)2 + CFn/(1+r)n where:
Example: Given that the five-year future cash flows are $170,000, $200,000, $250,000, $330,000, and $400,000 with the discount rate of 7% and investment cost of $750,000. The total net present value of the future cash flows amounted to $1,074,591, which is higher by $324,591 than the investment cost. It can be projected that given the positive discounted cash flow, the proposed project is worth pursuing. Excel for discounted cash flow is an invaluable tool in computing for business valuation. It is a widely utilized and trusted approach since it uses the cash flows and the time value of money, which shows how much investors would get if invested in companies with similar risks. It would be helpful to use alongside other business valuations to strengthen the result and provide more reliable forecasts. Widely available financial model templates are available online, incorporating the discounted valuation method and other valuation approaches in the projection. eFinancialModels industry experts prepared financial model templates are easy to use and manipulate, which can save you time and resources than prepared from scratch on your own. Financial modeling in Excel is known to be one of the most highly valued skills as it has become an essential skill that one must at least have a little bit of knowledge about, especially if you’re running a business, planning to run a business, investing, financial planning, and many more uses. Before you can even start building a financial model, you will need a substantial amount of knowledge regarding financial modeling in Excel and countless trial and error as you create financial models for different industries to broaden your industry know-how further.
Do you want to start learning financial modeling? Are you interested in building a career out of finance-related jobs or financial modeling? Or do you only want to advance your current knowledge about financial modeling? They say building a financial model is an art as it requires a lot of training and practice. This means that you will need to obligate a lot of your time to learn it. There is nothing to worry about since this can be remedied by attending classes about financial modeling even better that you can access courses through an online platform. Learning will always be a necessity no matter what subject, especially so for financial modeling. It is not an excess of time, especially when you strive to perfect your skills. Nowadays, learning skills through online classes is a lot more essential compared to the conventional way of education. What is sought after more are specific skills that will be useful for the employer. The whole process is very convenient for any type of student since it is possible to learn anything without having to leave your home. It is a fact that with the rise of the internet and online connectivity, getting educated online is a popular trend that many often choose as a way of learning. Aside from not having to spend money on transportation and being safe from particular circumstances, the convenience of being able to choose specific courses you want to focus on helps with learning faster. There is no prerequisite to repeat and the same scenario of mind-numbing education that requires one to stay in a classroom with subjects that are not related to what you wanted to learn. Especially for working people who are looking only to just further increase their current knowledge about a particular subject, learning online is still the best option to go after. Depending on the focus of your learning, you can start from the following topics step by step: • Basic Accounting that is needed to be able to build the three financial statements such as the income statement, the balance sheet, and then the cash flow statement • Calculating the Profit and Cash Flows Projection • Conducting Financial Ratio Analysis and its implications • Learning the proper design and logic on how to build Financial Models in Excel • Creating reports for Debt schedule, Fixed Asset Schedule, and Estimate Net Working Capital items • Conducting Valuation using different kinds of methods • Industry best practices in building Excel spreadsheets and Formulas used • Etc. These are just a drop of what you can learn about financial modeling in Excel. If you are interested in learning financial modeling online but can’t quite decide which course to enroll in, you can check out our List of Financial Modeling Course Recommendations. This lists the courses that you can pursue, depending on your needs and where you can enroll. You can also use the financial modeling Excel templates at eFinancialModels, a platform that can help you provide samples to refer to when trying to build industry-specific financial models and for different use cases. In financial modeling, there are many financial ratios used to help determine the financial feasibility and profitability of a business or a project. One of the commonly used financial ratios is the Internal Rate of Return or also known as the IRR.
The internal rate of return or IRR is a very favorable financial ratio that is used to appraise the appeal of a business venture or a project. Many are reliant on this financial ratio which made it possible to calculate easier why utilizing MS Excel’s function that allows the calculation of IRR by merely adding the IRR formula. In MS Excel, there you can find two IRR formulas to use - IRR formula and the XIRR formula (also known as Extended Internal Rate of Return). Both helps with calculating the IRR but not exacltly the same. The difference among the two is the following: 1. IRR Formula – it is used to calculate the Internal Rate of Return with the assumption that each cash flow event occurs annually. 2. XIRR Formula – it is used to calculate the Internal Rate of Return with an assumption of series of cash flows that transpireat irregular intervals by specific time periods. Another difference from the IRR vs. XIRR is how the syntax of each formula function is written. To know further the difference and understand further about the IRR vs. XIRR, please read the full article: IRR vs XIRR Formulas in Excel. Once you try to apply each function in your financial model, you can tell that it is undeniable that the XIRR function provides a further accurate calculation of the IRR. Due to its consideration of the timing of the cash flows, XIRR Function can cover the different cash flows that is inputted. The only disadvantage to it is that this means that you need to collect or input more data with precision in mind such as the exact dates and value with no estimations. Otherwise, the accurateness of the resulting data will not be reliable. This doesn’t mean that the IRR function is not helpful. Since the IRR function is very straightforward and easy to calculate, most often prefers the use of it. It is also the best option for generic calculations where the assumption annual cash flow holds. IRR vs. XIRR, which function is better to use when calculating the IRR? You should be able to tell which one to use simply by determining the cash flows’ pattern. If you’re looking for financial model templates that include the calculation and apply the IRR or XIRR functions, you can download here: IRR Financial Model Templates. Download Financial Model Templates with IRR vs. XIRR When creating a financial model, it usually takes a lot of time, especially if you have the intention to include several financial ratios to calculate. To help you save time and resources, you can simply download ready-made financial model templates that include the calculation of IRR vs. XIRR. If you are looking for a platform where you can download financial model templates with IRR vs. XIRR functions applied, then you can try checking out eFinancialModels. This platform offers a wide range of industry-specific financial model templates and financial modeling assistance, as well as customization services. Financial modeling experts and consultants create templates with vast experience and know-how regarding different industries and financial modeling. Save your time from creating a financial model from scratch and start downloading a financial model template of your choosing instead, especially ones with IRR vs. XIRR calculation. As you already know, break even analysis is the task of determining the break even point or as others call it “reaching break even.” It is a point in time where the initial costs incurred are all paid back by the sales. It is a point in time where there is zero profit or loss in your business.
Determining the break even point is a very important factor when it comes to the profit planning process. As such, it is one of the financial metrics that investors look forward to when it comes to determining which investment venture is attractive. If you want to convince your leads to think that your business is financially feasible and profitable, then showing a short break even period is the best. However, it is not advisable to manipulate since it will cause problems down the road for using unrealistic figures. As mentioned above, by simply building a break even analysis or looking at one, if you’re an investor, you can use it as a tool to determine the economic feasibility of an investment proposal. Though there are also other financial metrics used to determine the financial viability and profitability of an investment proposal, break even point is one of the most commonly used due to its simplicity and how easy it is to understand. How to Build a Break Even Analysis Excel Model Understanding a break even analysis report is one thing, but building it is a different matter, especially for different business cases. In other words, it’s not that easy to build a break even analysis report and a bit complex without the right know-how. In some cases, it will even require one to hire a professional to conduct the analysis to ensure that you will be able to cover all bases when it comes to real estate financial modeling. Still, though hiring an expert makes a difference, it can be quite costly, which not all will be welcome. That is why utilizing ready-made templates are much more preferable. Even the professionals use the model templates since they can also save time from creating break, even analysis reports. If you’re planning to build your break even analysis Excel model, there are two ways that you can calculate the break even point - in Dollars and in Unit. To learn how to calculate the break even point in Unit and Dollars, you can also check this article out: What is Break-Even Analysis? Both derive the break even point but use different ways of calculation; as such, it can be complicated at times. However, if you want to save yourself from building from scratch and using a lot of time creating a break even analysis Excel report, you can simply download a break even analysis Excel template. You can use it as a base to start with or a reference when building your very own break even analysis report. If you’re looking for break-even analysis Excel templates or other financial model templates that are industry-specific for different use cases, simply visit eFinancialModels. This platform offers financial modeling services as well as a wide variety of financial model templates ready-made by financial modeling experts. Money is the lifeblood of all size of business. Tracking the flow of your cash is an important matter that every business owners and managers should do. Other financial statements, e.g. Income Statement, would determine whether you’re making a profit, but not the movement of your cash or to evaluate your cash-generating capacity.
Financial Statements like Balance Sheet and Profit & Loss focuses on financial status and performance, leaving out cash transactions. That is now why a Cash Flow Statement has come into play. This statement focuses on the cash transactions and equivalents. This truly plays a crucial role in the functioning of a company. A cash flow statement gives important information regarding changes in cash and cash equivalents and afterward classifying cash flows into operating, investing and financing activities. Creating a monthly cash flow statement template is much important especially if a company is managing and monitoring tons of cash flow activities per month. Creating a standard template will greatly lessen the amount of time and work you spent for it. Below are the many advantages of using a monthly cash flow statement template on your business: • The Cash Flow Statements provides you with all information about your cash inflows and outflows from various operations which gives you detail about your entity’s revenue. • Using a Cash Flow Statement Template gives ease for non-accountant users who only have basic skills and understanding about managing one’s cash flows. • This statement helps in comparing the cash budgets from past to present assessments for future requirements of cash. Simply, it helps prepare the cash budget for future needs. • It evaluates the cash structure of a business by providing information about the investing and financing cash transactions took placed within a month, quarter or year. • The monthly cash flow statement template can tell you when you will have enough money to purchase needed resources. This way, you can avoid incurring loan interest if you tend to borrow. • Anyone interested or has stake on your business can quickly look over the health of your company by examining your cash flow statement. • Preparing a model which shows business owners alternate scenarios allow them to understand how various scenarios can impact their cash flow, e.g. late payment from a client which you plan to use the money to pay for certain expenses. • You will know if you’ll have surplus cash by tracking and seeing your cash flow activities, meaning the owners and managers can plan ahead what to do with it. There are actually tons of advantages by using a monthly cash flow statement template, and these are just some of it. So understanding its use is very important for you to have confidence in managing and evaluation your cash. Correctly managing your cash flows is essential for the survival of your business which can be done in many ways, with spreadsheet method the most popular and commonly used by many companies. It is now the perfect time to get yourself an excellent and effective Cash Flow Projection Template offered by eFinanciamodels to help you with managing your cash flows. Corporate Goals and Projects are getting advanced and complicated as your business grows every day. That is why Project Planning is very important to help you decide and complete a project, as well as reach your objectives successfully. Usually, the process of project management may not be given the utmost attention it needed in the company leading to the increasing difficulty to stay organized and afloat among pending corporate projects.
Project Planning is a powerful tool that can bring many benefits to different kinds and types of businesses. It basically defines how your project should be executed, evaluated and managed so as to get the best results. It also gives you quotable instructions, techniques and processes to help you better manage all aspects involved in your projects. Most importantly, it can increase your chances of success and help you deliver high quality projects efficiently, on time and budget. Here are some notable advantages of using a project plan template in google sheets: 1. Risk Reduction through planning – The main purpose of using project plan templates is to identify potential risk and problems even before they happen or occur on the project itself. This tool is there to guide and provide clearer view how they should act upon a project. 2. Saves time by utilizing a standard template - Eliminate an awful lot of time of developing a project plan template just by using a standardized project plan template. Just customize and adjust the events and values to reflect the expected results. 3. Effective Team Collaboration – A project plan template in google sheets would be your best strategy to for effective team communication and effort. Consolidate all work in one google sheets document and every team member can easily access and edit it. The needless tension and additional work is significantly minimized due to good communication and strengthened team cohesion. 4. On schedule and maintains budget – Effective project planning can surely help the organization be always on top of all schedules works and projects since you can now easily evaluate and manage a project. Also, planning will allow you to better organize and maintain your cost and expenses at a budget. 5. Increases end users satisfaction – Using an excellent project planning tool in documenting and communicating the project to clients and investors, ensures that projects expectations are being met.This helps you to answer their questions in a much more timely and assured manner regarding the progress of a project. Overall, using a project plan template in google sheets supervises the preparation, coordination, and execution of a corporate project. Whichever entity you work in, the team will benefit from following the fundamentals of a project management plan.So taking the time to prepare the project correctly would help prevent possible complications and potential failures. eFinancialModels offers free and paid project plan templates that can be very useful if you need help of a project plan for all kinds of projects. Using these templates for your next project, you can surely see a difference that contributes to the success of your company. Strategic Financial Planning is necessary as it is vital in making critical business decisions that affects the company as a whole. Using the right and effective tools for managing, tracking, analyzing and evaluating financial data helps owners and managers to do the right decisions. One most commonly used tool by business owners is Financial Spreadsheets. It’s so popular especially in inputting and tracking important data, although subject to some limitations.
A previous Google Survey of 2,000 American adults asked “What tool do you use to track your finances?” This survey concludes that 14% of Americans use spreadsheets to track their finances (approximately 24 million US Citizen as of data taken from July 2018. Financial Spreadsheet Templates is very popular mainly because of the advantages and benefits it can offer to business owners and managers. Microsoft Excel is usually used to input, evaluate and visualize financial data. Having set of data like financial, statistical and numerical, Excel Spreadsheet is the best way to do it, because not only you can use it as a financial representation, but also you can work and manage those data. Spreadsheet Templates are so flexible that you can use it on various complex processes and scenarios. Here are some advantages of using financial spreadsheet templates: 1. Spreadsheet Templates are your Lifetime Financial Tool - it’s important that you have tools that will help you along towards your financial prosperity. Templates can be used for long term, on every point at your financial journey, to always help and guide you in making analytic decisions. 2. Simple and Easy to Use - Spreadsheet are very simply to use and is usually utilized for data collection and organization. Financial Data can be input in neat rows and column, and can be sorted or categorized. Most importantly, Spreadsheet Templates can allow vast amount of financial information to store in it, but can still looked very presentable and organized. Furthermore, 3. Graphical Displays of Data –Spreadsheet enables user to generate visual representation and graphs of the data for easy analyzation. It offers hundreds of ways to do it - from different charts, to bar graphs, you decide! 4. Track multiple finances in one place - Be able to track multiple financial data all in one place. This enables for easy evaluation and analyzation since you only need to glance in one spreadsheet. It also allows for data interconnection and simultaneously track from different spreadsheets. 5. Streamlined Calculations - The main purpose of using spreadsheet in making financial decisions, is it calculates financial values quickly and easily. It simply does all the math for business owners and managers. Just set up the values and equations, and you will get instant results for a quicker creation of economic decisions. 6. Financial Forecasting -Large corporations need to have solutions for financial forecasting that allow them to plan their finances for months in advance. Excel's budgeting tool includes a regression analysis solution that allows users to forecast sales for a particular product for the upcoming year. 7. Team Collaboration - Currently, work environment mostly requires multiple users to access the same data and information to work on. Microsoft Excel Spreadsheet can easily be shared to anyone, but only at a single time, if changes where to be made. Therefore, Google Sheets is a great solution for multiple users to see and edit the same file at the same time. 8. Linking related spreadsheet and data - As mentioned earlier, one great benefit of working with spreadsheet is that it can easily be linked to other sheets, or even spreadsheets. This is most important if you need tons of data interconnection in one main document, for example, creating financial statements with required supporting sheets and data. 9. Personal Modification - Working with spreadsheet gives users freedom for personalization, especially if a certain brand is needed to be incorporated. Be able to modify the colors, fonts, rows, columns and others. 10. Time Period Comparison - Since Spreadsheet Templates can be used for long-term, you can also utilize this tool to track and compare your financial data in different time periods. Where to get Financial Spreadsheet Templates? The best feature of spreadsheets templates that is admired by many corporate users is its flexibility. Spreadsheets provide ultimate flexibility for how you track your financial life. Incorporating spreadsheet templates into everyday tasks, making your job streamlined and easier to manage your budgets and finances. eFinancialModels offers a wide variety of Financial Spreadsheet Templates perfect for any kind of niches and industry to help you with your finances, budgeting, forecasting, and other financial decision related needs. Real Estate Development is a complex process that involves series of steps. Originally, it is just a concept, and after putting all the work together, the result will be a fully developed property ready to be purchased or leased. The property developed could either be residential or commercial property. Commercial properties tend to be more complex as they need to be built in much stronger specifications, requiring larger investment.
Steps in Building Real Estate Development Financial Model Financial Modeling for Real Estate Development is pretty complex, which require clarity and accuracy in projecting the cash flow of a particular project. Cash flow for real estate development shall include determination of the following assumptions of revenue build-up, expenses, financing, and levered free cash flow. Let’s get into details. 1. Revenue Build Up Assumptions Revenue is the first thing we need to calculate to find out unit absorption or the number of townhouse available in a given period and closings or number of Townhouse closed once construction is complete. Here is the formula:
2. Expenses Assumptions This includes all the development cost incurred in the development of the project, such as land acquisition cost, pre-construction expenses, and construction costs.
3. Determine the Cost of Fund and Proceeds to Repay the Capital The cost to fund is the pitfall in the project cash flow. Like all other businesses,cash flows should always be positive as we cannot proceed with the project without enough cash. The cash flow generated from revenue should be enough to cover the development cost and repayment of borrowed capital.
4. Calculate for Financing Compute the loan balances, repayments, and accrued interest. Create a table that contains the following details and ensure that the ending balance shall not exceed the maximum amount of loan. 5. Determine Free Cash Flow Calculate for the levered free cash flow
Equity Balance is simply the cumulative FCF
7. Calculate Levered IRR
Conclusion: Financial modeling for real estate development requires a well-structured template Financial modeling for real estate development is a complex process where a lot of things could go wrong. Developers earn a bunch of money because it’s not simple to develop a property, and few have perseverance, skill, and financial ability to do it. Thus, the financial model shall coincide with the complexity of the real estate development business. It should be a well-structured template built-in flexibility to derive results accurately. Real estate is one biggest contributor in the world's economy generating billions of dollars of revenue annually. For an individual interested in real estate financial modeling, he should be able to have a robust knowledge of the whole industry sector to be able to form a dependable model. Mastering the principles of the real estate industry coupled with solid foundation in finance will allow you to build reasonable assumptions and analysis.
What is Valuation in Real Estate? In real estate investment, property valuation plays a vital role when buying or selling a property. Determining the value of the property allows the investor to compare its value to the asking price of the property. For the Seller, a property valuation very often forms the basis for his decision to sell the property and how to price it. However, valuation in real estate is far more complicated than it seems; it requires a more complicated analysis and sound knowledge to derive the property value. What makes it more complicated is that the market value of a property is influenced by several important factors such as the property’s location, the market conditions with tenants and available spaces, the property’s condition and need for renovations and other factors. This all needs to be considered when determining the value in real estate financial modeling. Valuation methods can be differentiated using three approaches: • Comparative Market Analysis is a valuation method that determines the property value with reference to the similarity of sizes, amenities, and location of the property being assessed. An ideal comparative market analysis shall provide you with how much similar properties are selling, how long does it take to sell, and their sales prices to list price. This approach is recommended in cases of high similarity between properties selling under a similar market condition in the same period. • Income Method is a valuation technique used when the property being assessed is intended to generate income from rents or leases. This method considers the property's value as the present value of projected cash flow expected to be generated from the property. In other words, this approach is based on the ability of the property to generate monthly income. • Cost Approach is the valuation technique that is not dependent on the market value of the assessed property but instead the method values the property based on the cost of the building and the land. It is often used when the property is newly renovated or when having to identify the replacement value of a property given its current conditions. Why should we use an Excel template for real estate valuation? As discussed above, real estate financial modelling is far complicated than it seems. All these three approaches will require you plenty of time to complete. Using a real estate financial modeling excel template, you will be at peace that your calculations are free from logical errors, and the valuations derived are consistent with your inputs thus, making an effective foundation for your analysis and decision-making. Conclusion: Real Estate Financial Modeling is more efficient in Excel Property valuation is in itself intricate and requires a deep understanding. The more factors needed in your computation, the harder an analysis could be. Thus, an excellent real estate financial modeling template in Excel could be of great advantage for decision-makers not only that it offers efficiency but also offers full transparency in all aspects of the real estate analysis. |
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