Product Viability Model – Financial Planner

£47.50 excl. VAT


 

  • Professional Financial Model – Easily calculate product viability and payback.
  • Financial Scenario Analysis – (what if….) on 10+ variables and critical success factors.
  • Easy and compelling scenario modeling for best and worst case analysis.
  • Cumulative Discounted Cash-flow analysis – visual plots.
  • Ratio analysis – 12 pre-set and 4 user configurable.
  • Easy integration with your own Spreadsheets / Workbooks.
  • Ideal for autonomous / team workshop use – produce high impact presentations.
  • Download, install and use immediately after purchase.

This is an essential business model for any business developing and managing products throughout their product lifecycle. This powerful Financial Model enables a comprehensive array of financial data to be entered regarding a proposed ‘new’ Product (or existing products if the life-cycle analysis is required). On completion, the model enables you to put forward a compelling set of results… for Strategizing throughout the lifecycle, you will find this model absolutely perfect.

…simply enter your market / financial data into the entry fields and the model will produce a comprehensive set of cashflow / discounted cashflow predictions, a full summary of results to include ratios, together with the opportunity to check best and worst case scenarios (made up of 10 variables) simply by moving control sliders. Understanding when payback will take place and the predicted value of cashflow, profit and the associated surplus is calculated in minutes. Quite simply one of the most powerful financial analysis tools available.

This model is an invaluable tool for anyone involved with ‘new product development’ (particularly hardware type products but not exclusively), ‘product management’ and ‘market development’. The innovation ‘entrepreneur’ will also find this tool immensely useful.

 

Description

This comprehensive Financial (discounted) payback Model enables a comprehensive array of financial data to be entered regarding a proposed ‘new’ Product (or existing products if the life-cycle analysis is required). On completion, the model enables you to put forward a compelling set of results…

The Product Viability Model is a ‘ready to use’ business application module for the Microsoft® Excel spreadsheet. This versatile product is a member of IPM’s Business Solution Series, it will help you to determine the commercial viability of a new product before committing to actual development. IPM has harnessed the powerful features available in Microsoft® Excel to give you one of the most comprehensive business modeling products available today.

Financial ratios, interactive scenario analysis and discounted cashflow projections up to 6 years can all be produced and analysed with ease. Management presentations can be undertaken with absolute confidence and “what if” scenarios can be dealt with in real time. The Product Viability Model will have immense value to anyone with a professional interest in product business planning. Company Directors, Marketing Managers, Product Managers, Development Managers and Consultants will find this an invaluable business tool. The generic nature of this application makes it eminently suitable for a wide range of business fields.

The Product Viability Model is extremely versatile and easy to use. Colour coded templates and navigational maps provide the user with a modern, ergonomic interface. Application help is provided throughout the product in the form of cell notes that can be viewed automatically in Excel (when the mouse cursor is placed over a cell note indicator).

Financial Modeling

– Financial Scenario Analysis – (what if….) on 10+ variables and critical success factors

– Direct and Indirect Sales entry

– Fixed and variable Costs entry

– Discounted Cash-flow analysis

– Ratio analysis – 12 pre-set and 4 user configurable

– Assets and liabilities

…simply enter your market / financial data into the entry fields and the model will produce a comprehensive set of cashflow / discounted cashflow predictions, a full summary of results to include ratios, together with the opportunity to check best and worst case scenarios (made up of 10 variables) simply by moving control sliders. Understanding when payback will take place and the predicted value of cashflow, profit, and the associated surplus is calculated in minutes. Quite simply one of the most powerful financial analysis tools available.

The model is an invaluable tool for anyone involved with ‘new product development’ (particularly hardware type products but not exclusively), ‘product management’ and ‘market development’. The innovation ‘entrepreneur’ will also find this tool immensely useful.

Product Viability Model – Elements

The Product Viability Model is made up of the following elements

  • Revenue
  • Variable Costs
  • Fixed Costs
  • Assets and Liabilities
  • Scenario – What if
  • Results and Summary

Revenue

Sales (Direct) :

Sales (Direct) is the sales revenue forecast for direct sales (sales achieved via your own sales force directly to the end user). Data is entered in the form of volume and unit selling price.

Sales (OEM / Dealer)

Sales (OEM / Dealer) is the sales revenue forecast for indirect sales (sales achieved via a dealer or distribution network). Data is entered in the form of volume and unit selling price.

Variable Costs

Variable Costs (Direct)

Variable Costs (Direct) are, the variable costs associated with distributing the product through your own distribution channel and are entered in the form of a % of the unit selling price. Variable costs are broken down into three elements.

  • Distribution / selling costs
  • Warranty Costs
  • Freight/Duty/Local Costs
Variable Costs (OEM / Dealer)

Variable Costs (OEM / Dealer) are, the variable costs associated with distributing the product through a dealer channel and are entered in the form of a % of the unit selling price. Variable costs are broken down into three elements.

  • Distribution / selling costs
  • Warranty Costs
  • Freight/Duty/Local Costs
Manufacturing Cost

Manufacturing Cost is the per unit cost of the product. Data is entered in the form of a High volume cost/unit, a Low volume cost/unit, together with a unit price break.

Fixed Costs

Fixed Costs (Direct)

Fixed Costs (Direct) are, the fixed costs associated with distributing the product through your own distribution channel. Fixed costs are broken down into the following areas.

Marketing Communications
Sales
After sales
Indirect Costs

Each of the above is subdivided into further elements and can be re-labeled if required.

Fixed Costs (OEM / Direct)

Fixed costs (OEM / Direct) are the fixed costs associated with distributing the product through a dealer distribution channel. Fixed costs are broken down into the following areas.

  • Marketing Communications
  • Sales
  • After sales
  • Indirect Costs

Each of the above areas is subdivided into further elements and can be re-labeled if required.

Development Costs

Development Costs are the costs associated with developing the product. Product development costs are broken down into two categories :

  • Development Costs
  • Capital Costs

Each of the above areas is subdivided into further elements and can be re-labeled if required.

Capital Costs entered into this field are not subject to depreciation and consequently, have not been used in the cashflow calculation. However, costs are transferred to the summary sheets.

Assets and Liabilities

Capital Expenditure

Capital Expenditure is part of Development Costs. Capital Costs entered into this field are not subject to depreciation and consequently, have not been used in the cashflow calculation. However, costs are transferred to the summary sheets.

Manufacturing Stock

Manufacturing stock is entered as a % of manufacturing cost. Increasing the rotational stock will lead to a theoretical improvement in delivery time scales. Manufacturing stock can also be entered as a fixed value if required.

Assets and Liabilities

Creditor and Debtor days can be set independently of each other and are used to calculate a Working Capital requirement. Development costs are added to the Working Capital requirement to provide a Total Working Capital requirement per year. Liquidity and Current ratios are also calculated on a per year basis.

Information regarding headcount (summation of Fixed headcount) and associated costs have been included in the assets and liabilities summary.

Scenarios (What if…..)

Sensitivity

This field enables you to run ‘what if’… scenarios and comprises of two totally independent scenario fields that are benchmarked to the baseline of the plan. Percentage variances are entered for each of the 10 ‘what if’… categories and a Line graph, situated adjacent to the entry field, immediately displays the effect. The user can select the graph in view (Profit, Revenue, Cashflow, Discounted cashflow) from this field.

What if… Categories :

  • Income (Direct)
  • Income (OEM / Dealer)
  • Variable Costs (Direct)
  • Variable Costs (OEM / Dealer)
  • Fixed Costs (Direct)
  • Fixed Costs (OEM / Dealer)
  • Development
  • Capital Costs
  • Manufacturing Costs
  • Manufacturing Stock

Results and Summary

Summary

Three sets of summary results are provided.

  • Plan Summary (or Baseline)
  • Scenario 1 summary (parameter variance in the Sensitivity field)
  • Scenario 2 summary (parameter variance in the Sensitivity field)

Each summary produced is identical in structure and as such will help when comparing results.

NPV ratio and development recovery % are situated on the Plan Summary sheet.

Ratios

12 key financial ratios provide a performance overview of the plan (baseline) together with scenarios’ 1 and 2. A mission (or Goal) can be entered for each of the factors / ratios.

  • Profit (%Sales)
  • Manufacturing cost (%Sales)
  • Total Fixed & Var. Costs (%Sales)
  • Development recovery (%Sales)
  • Development Cost
  • Development Cost (%Sales)
  • Capital Cost
  • Direct Sales (%Sales)
  • Indirect Sales (%Sales)
  • Marketing Communication (%Sales)
  • After Sales (%Sales)
  • Discounted Cash Flow Surplus after 6 years

The 12 pre-defined ratios are complemented by four user-defined ratio fields, allowing the user to define specific ratios if required.

Graphs

This field summarises in a graphical form results from the model. The following graphs are presented :

Profit: Line Graph
Revenue: Line Graph
Cumulative Cash Flow : Line Graph
Cumulative Discounted Cash Flow: Line Graph
Cost Breakdown: Pie Chart

A top-level financial summary is provided in the form of :

  • Total Revenue
  • Variable Costs
  • Gross Profit
  • Profit

 

Note: This model requires a full version of Microsoft Excel – macro-enabled to be installed on your PC / Mac.