Shipping Vessel Financial Model – Excel XLSX

BENEFITS OF THIS DOWNLOADABLE EXCEL DOCUMENT

1. The model generates the three financial statements.
2. The financing options for the project include a standard long term loan as well as an overdraft facility and of course equity funding from investors.
3. Presents the business case of the purchase of two vessels with the intent of chartering them to generate revenues.

SHIPPING INDUSTRY EXCEL DESCRIPTION

Editor Summary Shipping Vessel Financial Model is an XLSX financial model by Big4WallStreet (author with 15+ years at Ernst & Young, Toyota, Viohalco, and Upstream; CFI and FMI certified) that builds a business case for purchasing 2 vessels to charter. Read more Produces 3 financial statements, cash flows, and valuation metrics such as NPV, IRR, payback period, cash-on-cash multiple, enterprise value, DSCR and LLCR. Supports financing via long‑term loan, overdraft, and equity. Available on Flevy with immediate digital download.

Use this model when assessing the purchase-and-charter economics of one or 2 vessels, comparing financing structures, or preparing lender/investor materials for a ship acquisition project.

  Project finance analysts building cash-flow forecasts and calculating NPV/IRR using free cash flows to the firm and WACC.
  Shipping company CFOs assessing vessel purchase, dry-dock capex, and operating cost impacts on profitability.
  Maritime investors modeling equity returns, cash-on-cash multiples, and payback scenarios.
  Financial modelers preparing bank-facing ratios and charts for DSCR and LLCR.

The model’s stepwise projection of financial statements, cash-flow based valuation, and banking-ratio analysis reflects standard project finance and corporate valuation practice.

Shipping Vessel's Financial Model presents the business case of the purchase of two vessels with the intent of chartering them to generate revenues. The model generates the three financial statements as well as the cash flows and calculates the relevant metrics (Net Present Value, Internal Rate of Return, payback period, cash on cash multiple, enterprise value, etc…). The financing options for the project include a standard long term loan as well as an overdraft facility and of course equity funding from investors.

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 title, responsible, a 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 a 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).

Guide Tab: This tab helps you to gain a grasp of the main value drivers of the model and understand the critical issues of the business.

Moving on to the Inputs (in yellow whatever can be amended as an assumption): detailed inputs for revenues (vessel characteristics, TCE rates for both handymax and supramax, availability days, and brokerage commissions), costs (crew, stores, repairs, maintenance, insurance and administrative), working capital (receivables, payables, and inventory), fixed assets and capex (vessel purchase, dry docks, special surveys), equity financing as well as valuation assumptions (such as discount rates used in the weighted average cost of capital tab or WACC).

In the Summary tab, you are able to see a high-level report with the main metrics and value drivers of the model. It can be readily printed on one page for your convenience.

Calculations: This is where all calculations are performed. The revenues from each vessel are calculated based on the available days and whether there is a need for dry-docking and deducting the operating costs adjusted for inflation 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 level of the investment considered the relevant debt financing is calculated (Long term debt and overdraft).

In the Outputs tab: everything is aggregated here into the relevant statements: profit and loss, balance sheet and cash flow.

Moving to the Investment Metrics tab, a valuation is performed by using the free cash flows to the firm and then a series of investment metrics are presented (Net Present Value, Internal Rate of Return, Payback Period, Cash on Cash multiple). Additionally, the Debt Service Coverage Ratio and the Loan Life Coverage Ratio are presented.

In the Graphs tab: Various graphs present the investment and operating costs, the revenues per vessel type and the banking ratios (DSCR and LLCR). Then multiple charts present the performance of the project from revenues to bottom line along with debt, assets, working capital and cash flows which result in valuation on a project basis as well as on an equity basis together with the internal rate of return of the project and payback period metrics.

Checks: A dedicated worksheet that makes sure that everything is working as it should!

Important Notice: Yellow indicates inputs and assumptions that the user is able to change, blue cells are used for called up cells, and white cells with black characters indicates calculation cells.

The model includes detailed assumptions for vessel characteristics, TCE rates, and brokerage commissions, ensuring precise revenue forecasts. Comprehensive graphs illustrate investment costs, operating expenses, and coverage ratios, providing a clear visual representation of financial performance.

TOPIC FAQ

What are the essential components of a shipping vessel financial model?

A complete model includes projected profit & loss, balance sheet, and cash flow statements, a cash-flow based valuation using free cash flows to the firm, and investment metrics such as NPV, IRR, payback and cash-on-cash multiple. It also reports banking ratios like DSCR and LLCR and built-in checks.

How do I forecast vessel revenues for a charter operation?

Revenue is typically calculated from vessel availability days multiplied by time charter equivalent (TCE) rates, adjusted for brokerage commissions and reduced for dry-docking periods. The model in the product uses available days and TCE rates for handymax and supramax as core drivers.

What financing structures should I model for a vessel acquisition project?

Typical structures include equity funding alongside debt facilities such as a long-term loan and a working overdraft. The model explicitly supports long-term debt, an overdraft facility, and equity financing when sizing interest, depreciation, and cash flows.

How is valuation performed in project-level vessel finance models?

Valuation is performed by projecting free cash flows to the firm and discounting them—using a WACC or other discount rate—to derive enterprise value, then calculating investor metrics like NPV, IRR, payback period, and cash-on-cash multiple based on those cash flows.

What should I check when buying a shipping vessel financial model?

Verify editable assumption inputs for vessel characteristics, TCE rates, capex and working capital; clear cell color coding for inputs/calls/calculations; included outputs of the 3 financial statements; built-in checks; and investment metrics and graphs that display DSCR/LLCR and valuation results.

What steps are involved in adapting a purchased vessel model to my project specifics?

Update the Manual tab for project title, timeline, and conventions; enter assumptions on the Inputs tab (vessel specs, TCE rates, costs, capex, working capital); review Calculations, then validate Outputs, Investment Metrics, Graphs, and Checks. Key editable fields include vessel characteristics and TCE rates.

Which debt service ratios should I present to lenders for a vessel financing?

Present standard coverage measures such as the Debt Service Coverage Ratio (DSCR) and the Loan Life Coverage Ratio (LLCR). The model provides both ratios and corresponding graphs for bank review, enabling lender-focused analysis using DSCR and LLCR.

Can a model compare project-level returns versus equity investor returns?

Yes. A suitable model aggregates cash flows and valuation on a project (enterprise) basis and separately on an equity basis, reporting internal rates of return and payback metrics for both project and equity investors so you can compare outcomes.

Source: Best Practices in Shipping Industry, Integrated Financial Model Excel: Shipping Vessel Financial Model Excel (XLSX) Spreadsheet, Big4WallStreet