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Forecast outputs explained

Learn about the outputs you get from your Numberslides forecast
MV
Written by Max Valentine
Updated 8 months ago

The whole reason that we build financial forecasts is to make decisions based on our predictions of the future numbers and whether the logic to get there makes sense.  We have built the outputs with the end user in mind - that is to say the management team, investor, bank manager and you.  We have simple one-table outputs to detailed financial statements and investor metrics.  The beauty of the outputs is that they are super flexible - you can show tables at the monthly, quarterly or annual level and can make this into a line chart where you can include as many (or as little) detail as possible.  Let's take a closer look:

Financial Summary

This is a simple table that is perfect to drop into your pitch, teaser or executive summary.  It can tell the reader the financial health and efficiency of the business and the ambition and grounded-ness of the management team.  It is a summary of the headlines from the Income Statement (with profit margins):

We also include a summary of the cash flow as cash does not equal profit and cash is ultimately king:

By clicking the check box in the top right, you can select the time cycle and to show the outputs graphically:

Detailed financial statements

We also give you the detailed financial statements - this will give you the three financial statements namely the Income Statement, Cash Flow Statement and Balance Sheet.  This is important for more detailed analysis and shows your the revenue and cost breakdowns line by line so you can see which revenues contribute the most and which costs have the greatest impact.  You can also do detailed working capital assessments and run a number of ratios that can help determine the efficiency and health.  We explain this in the practical accounting section of the knowledge base.

You can show the financial statements at the time cycle that suits you but you can also click the chart button and be presented with a number of key charts that you can include in your business plan or other documentation.  One of the key charts if you are fundraising is the "Use of Funds" pie chart - this is super important for your pitch deck as investors want to know why you need the money!

Metrics and ratios

Based on your forecasts, we calculate the important metrics and ratios for your business.  This includes growth rates of revenue, costs and profits which shows the ambition, the size of the market and market fit.  We also look at the efficiency of the workforce through the revenue per FTE (Full Time Equivalent i.e. full time employee) - this can differ between businesses and your own specific scenario but is a very good self check as is Opex / FTE.  We also include some of the profit margins already discussed in this article.  We are constantly updating the ratios to make them as useful and complete as possible.

Investor metrics

If you are fundraising (and even if not) then this is potentially the most important output section for you.  In this section, we calculate your business value (enterprise value) and we do this using discounted cashflows and the perpetuity method.  We explain this in here

We also map out your fundraising routes - so we work out your cash shortfall in each investment period (that you input) and based on the target equity that you will award the investor(s), we can calculate your valuation and your dilution.

We then include your "exit" assumptions - this is when you think that the investor will be able to earn their return (either through a trade sale, VC investment or IPO for example) and from the above we work out the absolute return to the investor and their MOIC (Multiple on Invested Capital) - this is the killer metric - the earlier the investment round hopefully the higher this is to reflect the relative level of risk taken.  As a simple example, if an investor invests £1m and is returned £11m on exit they have a MOIC of 10x (not a bad day's work).

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