Debt Collection Agency Financial Model (5 Year DCF and Valuation) (Excel XLSX)

BENEFITS OF DOCUMENT

1. 5-Year DCF and Valuation: Long-term financial projections, including NPV and IRR calculations.
2. Strategic Planning: Optimizes staffing, operational processes, and portfolio acquisition strategies.
3. Informed Decision-Making: Supports funding and expansion opportunities with financial clarity.

DESCRIPTION

This product (Debt Collection Agency Financial Model [5 Year DCF and Valuation]) is an Excel template (XLSX), which you can download immediately upon purchase.

The Debt Collection Agency Financial Model with a 5-Year DCF (Discounted Cash Flow) and Valuation provides a detailed financial analysis of a debt recovery business. It includes projections for collections, commissions, operating expenses, and profitability.

The model helps assess the agency's financial performance, investment viability, and scalability. Additionally, it produces pro-form financial statements, net present value (NPV), internal rate of return (IRR), and payback period to support decision-making and strategic growth.

Key Components:
1. Collections Forecast: Projections for collections and growth rates per entity or group.
2. Revenue Streams: Income from commission rates.
3. Operating Expenses: Breakdown of staffing, technology, marketing, and overhead costs.
4. 5-Year DCF and Valuation: Long-term financial projections, including NPV and IRR calculations.
5. Pro Forma Financial Statements: Detailed income statement, balance sheet, and cash flow projections.
6. Payback Period: Calculation of the time required to recover the initial investment.


Key Benefits:
1. Investment Viability: Assesses profitability and return potential for the debt recovery business.
2. Strategic Planning: Optimizes staffing, operational processes, and portfolio acquisition strategies.
3. Informed Decision-Making: Supports funding and expansion opportunities with financial clarity.
4. Investor Appeal: A professional financial model to secure investor confidence and funding.

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 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 ups (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).

Starting with Revenues, the user must fill-in the collections per corporation / group, afterward the user sets the collection growth, as well as the commissions percentage.

Next step is to set the cost sales margin:
The next item to adjust relates to the labor costs: the user needs to fill the basic salary and any extra allowances that are granted to the employees, the headcount and the headcount increase per year, and the total salary percentage increase per year.

In the next section ("SG&A"), the user needs to set the SG&A expenses, and the corresponding growth rates for the following years.

The next section ("Non-Current Assets") allows the user to set the total existing assets, the depreciation years, and the new capital expenditure as percentage of sales.

Moving to the "Financing" section, the user needs to set the following debt / equity schedules:
•  Existing Debt Financing: the user sets the loan balance, the annual interest rate, the repayment month, and the repayments per year.
•  Investment Financing: the initial investment is called up from the non-current assets schedule, the additional working capital needed, the drawdown date, the annual interest rate, the maturity in years, and the debt gearing.
•  Working Capital Financing: the user set the total drawdown, the drawdown date, the annual interest rate, the maturity in years, and the debt.
•  Growth Round Financing: the user set the total drawdown, the drawdown date, the annual interest rate, the maturity in years, and the debt gearing.
•  Overdraft Financing: the user just sets the annual interest rate, and the beginning cash balance.
•  Share Capital and Retained Earnings: the only input needed here from the user is the dividend distribution, and the opening retained earnings balance.

The working capital section: the user sets for each year the days receivables, payables, and inventory days, as well as the opening balance for each item.

In the tax section, the user just needs to set the tax rate for corporate income and the month in which taxes are paid. Additionally, the user can also set any tax payable from previous periods.

Finally in the valuation section, the user sets the cost of equity and any discount rate premiums, as well as the growth rate to perpetuity. The cost of debt is calculated automatically from the inputs in the financing section.

In each FS tab, monthly and yearly statements are generated based on all previous assumptions (Left annual, right monthly). These statements are generated for the debt collection agency and the holdings company.

In the same tab, a valuation is performed along with investment metrics such as enterprise value, equity value, net present value, internal rate of return, cash on cash multiple, and payback period.

In the Actuals + Plan tab, the user can see the historical and forecast main financials for the entire holding company.

Moving on to the next tab, a set of graphs summarizes all the major KPIs of the business both from a balance sheet perspective as well as from an income statement perspective.

Finally, in the last tab, various checks are performed and are aggregated here from the various worksheets. This tab ensures that everything on this model works as it should.

All the above are summarized in the "Executive Summary" which displays the most important parts of the model.

Source: Best Practices in Integrated Financial Model Excel: Debt Collection Agency Financial Model (5 Year DCF and Valuation) Excel (XLSX) Spreadsheet, Big4WallStreet