Investment Model

Financial Health Assessment

How does a business owner know if his/her business is in good financial health? In this module, the user is introduced to the important financial ratios that can indicate the well-being of a business. These include Profitability, Liquidity, Leverage, and Operating Performance. The user needs to simply input some of his/her business’ key accounting data and the ratios will be computed automatically. At the same time, the same set of ratios for the comparable industry will also be generated by the system. Hence, the user would be able to compare its own performance to that of those in the industry that he/she would like the business to be benchmarked against.

Click here for updates on the Financial Health Assessment Module


Investment Model

Cost of Financing

SMEs often focus on maximizing their revenue and/or reducing their operating costs but neglect to look at their cost of financing. What good is it for your shareholders if they are to receive less return compared to what other similar businesses, with similar risk, can offer? Similarly, would you enter into a new venture if it promises less return than what your cost of funds is? This module allows a business owner to estimate this cost. After selecting their industry and entering some of their own company’s data, the module will generate an estimate of their cost of financing, and compare it to their current returns. This estimate of their cost can also be used in the Investment module as the rate to discount forecasted cash flows.


Investment Model

Investment Model

This module allows business owners to evaluate the feasibility of a new investment based on their current assumptions. The module comes with a basic Financial Model and is supplemented by 2 add-ons: Probability and Forecast Module, and the Simulation Module.

The Financial Model adopts the discounted cash flow (timeline) methodology and automatically calculates cash flows and profitability analytics based on user inputs. This model is simplified and generalized to fit most industries. Users have discretion over a large number of assumptions relating to funding, sales, expenses and cost of financing.

The Probability and Forecast Module provides a method to benchmark the user's assumption of their starting price against market competitors. This module also uses the historical price fluctuations (of the industry selected by the user) to randomly derive a set of forecasted growth rates.

The Simulation Module is built for the purpose of considering the profitability impact of multiple combinations of past price fluctuations. This module randomly derives hundreds and thousands of sets of forecasted growth rates, and run these values through the Financial Model to build a range of outcomes that corresponds to different market cycles from bad to good. The module presents the results in graphical form and also calculates the probabilities of positive outcomes.