Yoga and Pilates Studio DCF Financial Model
Yoga and Pilates Studio DCF Financial Model is a tool that enables you to evaluate the feasibility of your start up idea. A detailed analysis of the studio's financial performance helps you make informed business decisions and set realistic goals. The model generates the three financial statements, key performance indicators, and assumptions to generate accurate and reliable financial projections.
Key Features include:
- Revenue Projections: hours for each class, students, group lesson fees, set up fees, exam fees, merchandise, camps.
- Expense Forecasting: operating expenses, including rent, salaries, utilities, marketing costs, equipment maintenance, and administrative expenses. By analyzing the net present value, payback period, profitability index and internal rate of return, we can determine the feasibility of our venture.
- Cash Flow Analysis: The model incorporates a detailed cash flow statement that tracks the inflow and outflow of cash over a 5-year period.
- Three Financial Statements over a period of 5 years
- Executive Summary including Ratios, and Sources and Uses of Funds
- Feasibility Assessment: The financial model calculates key profitability metrics such as gross profit margin, net profit margin, and return on investment.
- Valuation & Sensitivity Analysis: the valuation is performed using the discounted cash flows method (DCF) and a sensitivity analysis is also included to assess the impact on valuation.
- Break-Even Analysis: The model includes a break-even analysis that determines the point at which total revenue equals total expenses, resulting in neither profit nor loss.
- Funding Needs: The financial model provides insights into the funding needs of the studio.
- Graphs & Checks
Overall, the financial model serves as a powerful tool for strategic planning and financial decision-making. It helps us assess the financial viability of our Yoga and Pilates Studio, make informed business decisions, and ensure the long-term sustainability and success of our venture.
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 are able to 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 Main Inputs, in this tab, the user needs to adjust the business drivers in the yellow cells. The user starts by filling in the classes schedules where the user can set the hours per day, the various classes names, hours per week per activity, hours per cohort, and max students per class.
Moving on the user can set the number of new students per month for the first year, and per year from the second year onwards. Additionally, the user can set the number of lost students in a similar manner to with the new students’ inputs.
The next set of assumptions consists of revenue streams per activity and consist of group lesson fees, set up fees, exam fees, merchandise sales, and training camps.
The next section consists of direct cost assumptions for the previously mentioned activities which includes teachers’ costs per hour for the group lessons, and cost margins for the other revenue activities.
Next the user needs to set the rent are size, and then set the various start up investment costs such as working capital, floors, mats and walls, furniture, equipment, etc.
Finally, the user must set the recurring costs per month based on each cost driver such as rent, utilities, internet, insurance, marketing, etc. The user can also set the cost growth rate per year in the table below.
Moving to the Other Inputs tab, the user can set the tax assumptions, the labor costs in terms of headcount and salary, the depreciation rates for each of the depreciable investment items, and the capex to sales percentage for the continued maintenance required. The user needs to fill in the working capital assumptions in section 5 such as inventory days, receivables days, payables days, etc.
Finally, the user needs to set the percentage financed by debt, the loan duration, and the interest rate.
Calculations: this is where all calculations are performed. The revenues are calculated based on the previous inputs and the growth rates, and by deducting the operating costs, 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 existing debt financing and forecast assumptions the loan balances are calculated (Term loan and overdraft).
In the Financial Statements tab: everything is aggregated here into the relevant statements: profit and loss, balance sheet and cash flow on a yearly basis.
Moving to the Valuation tab, a free cash flow to the firm valuation is performed leading to an enterprise value. There is also a calculation of the Net Present Value, as well as an Internal Rate of Return, Profitability Index, Payback and Discounted Payback Period. Additionally, a sensitivity analysis is performed on the equity value of the business by using the discount rate and the growth rate to perpetuity as sensitivity parameters.
In the Graphs tab: Various graphs present the business metrics, revenues, investment & operating expenses, profitability metrics, additionally balance sheet and cash flow metrics, and we finish with discount rates, feasibility metrics and valuation graphs.
In the Break Even tab, you can find a break even analysis and see how many students and sales you need to break even.
Checks: A dedicated worksheet that makes sure that everything is working as it should!
In the summary tab you are able to see a high level report with the main financial and business ratios. It can be readily printed on one page for your convenience.