Micro-Brewery Business Financial Model (10+ Yrs. DCF and Valuation)

The Micro-Brewery Business Financial Model with a 10+ Years DCF (Discounted Cash Flow) and Valuation is a comprehensive tool designed to analyze the financial aspects of a microbrewery. It includes key components such as production costs, sales projections, pricing strategies, and long-term financial valuation. This model provides insights into the financial performance and value potential of the microbrewery, enabling informed decision-making, investment assessment, and strategic planning.

Key Components:

·         Capacity Utilization: Analysis of brewing capacity and its impact on production and sales.

·         Sales Projections: Forecasts for beer sales across various channels such as on site and retail, wholesale and online, as well as during tours and events.

·         Pricing: pricing across sales channels to maximize revenue.

·         Distribution Channels: Revenue and cost analysis for different distribution methods.

·         Operating Expenses: Administrative, marketing, and operational overhead costs.

·         Capital Expenditures (CapEx): Initial and ongoing investments in brewing equipment and facilities.

·         10+ Years DCF and Valuation: Long-term financial projections, including DCF analysis to assess the brewery's value and ROI.

Key Benefits:

·         Informed Decision Making: Provides detailed insights into cost structures, revenue streams, and profitability.

·         Strategic Planning: Helps in planning production, distribution, and marketing strategies for growth.

·         Profitability Analysis: Assesses the financial viability of different pricing strategies and product lines.

·         Investment Appeal: A robust financial model to present to potential investors and secure funding.

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MODEL GUIDELINES

So, a quick overview of the model, in the contents tab you can see the structure of the model and by clicking on any of the headlines to be redirected to the relevant worksheet.

On the manual tab you can feed the general information for the model such as: project name & title, responsible, timeline of the model and date and currency conventions.

Additionally, there is a description of the color coding of the model in the same tab. Inputs are always depicted with a yellow fill and blue letters, call up (that is direct links from other cells) are filled in light blue with blue letters while calculations are depicted with white fill and black characters.

There is also color coding for the various tabs of the model. Yellow tabs are mostly assumptions tabs, grey tabs are calculations tabs, blue tabs are outputs tabs (that is effectively results or graphs) and finally light blue tabs are admin tabs (for example: the cover page, contents, and checks).

Moving on to the Inputs: detailed inputs for revenues such as bottles sold, price per channel sold (on site, retail, wholesale, online, tour, events), max production capacity, and costs splits between direct costs and indirect costs (such as admin staff, outsourced staff, insurance, advertising & promotions as well as other costs), working capital (receivables, payables, and inventory), fixed assets and capex (split into start up investment and new maintenance capex), debt & equity financing as well as valuation assumptions (such as discount rates used in the weighted average cost of capital).

In the summary tab you can see a high-level report with the main metrics and value drivers of the model. It can be readily printed on one page for your convenience.

Calculations: this is where all calculations are performed. The revenues are calculated based on the various revenue streams and by deducting the operating costs adjusted for inflation the operating profit is resulting. Based on the assets financed and the gearing of the financing the interest and depreciation are occurring. By using the working capital assumptions, the impact of the business cycle is presented. Finally, depending on the level of the investment considered the relevant debt financing is calculated (Long term debt and overdraft).

In the Outputs tab: everything is aggregated here into the relevant statements: profit and loss, balance sheet and cash flow.

Moving to the Valuation tab, a valuation is performed by using the free cash flows to the firm and then a series of investment metrics are presented (Net Present Value, Internal Rate of Return, Profitability Index, Payback Period, Discounted Payback Period, Sensitivity Analysis).

In the Graphs tab: Various graphs present the business metrics, revenues, operating costs, and profitability. Then multiple charts present the working capital, debt & equity along with cash, assets, and cash flows which results in a valuation on a project basis as well as on an equity basis together with the feasibility metrics.

In the Break-Even tab, you can find a break-even analysis and see how many sales you need to break even.

Checks: A dedicated worksheet that makes sure that everything is working as it should!

Important Notice: Yellow indicates inputs and assumptions that the user can change, blue cells are used for called up cells, and white cells with black characters indicates calculation cells.