Lazuli Solutions creates transparent financial models in Excel for your business - and we keep it simple.

For more information contact us.

 

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modelling

A good model is the focus and basis for starting a new business or managing an existing business.  We have over twenty years experience listening to business stories and designing appropriate modelling solutions.

Tell us your story and find out more in Our Work

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training

Training can take you to the next level.  We can lend you our experience as well as our passion for imparting knowledge, in a structured environment and completely tailor-made to your needs.  Dominic Robertson runs project finance modelling courses at BPP in London.

Find out more at Project finance modelling course

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model review

Making sure a model is working properly is crucial.  If you need a model checked then we can carry out a surprisingly effective model review.  There are unexpected benefits in our creative method.  To find out more get in touch.

Find out more at ExcelCheck

Understand

Discuss, understand and specify the detailed structure and content of the entity.   An appreciation for the dimensions of the issues is sufficient at this stage.

Organise

Like writing a book, the entity is defined in and across sheets.   But only from outputs to the calculations.   Structural scope is sufficient.

This structure will include a first attempt at the ‘dimensional model’.   The 'dimensional model' is the chosen way of representing the dimensions of the modelling question.

Standardise

The meat of the model is added to the structure.

Classify

The new language of the business is classified and so formalised.

Control

The ‘Control Panel’ is added with the current and appropriate mix of inputs and outputs.   The user now has full control of the model.

By iterating the model from the control panel the user gains an 'intuitive understanding' of the business.

Iterate

 

Long-term strategic operating models

What are strategic operating models?

A Strategic Operating Model is a spreadsheet financial model that forecasts twenty to forty years into the future.  It does this by seeding the model with the latest management accounting actuals and using forecast assumptions.

It is also a financial model:

  • With detailed operational, finance and financing calculations
  • With profit & loss, cash flow and balance sheet
  • With investor returns, banking covenants and business ratios
  • With a semi-annual periodicity (although this can also be annual or quarterly)
  • With a 20 to 40-year timeline
  • That contains multiple input & results sets
  • In Excel, written in the FAST modelling standard
  • That is simple and clear to understand

Who is it for?

These models (in their wide-ranging and complex form) were created for large monopolistic infrastructure companies and clearly suit these businesses and their shareholders.

However, the essence of these models in a reduced style also suit any business that wants to gain an intuitive understanding of the future - for a detailed discussion of this see strategic operating models for your business.

What are the features of a strategic operating model?

  • Automatic production of statutory company financial statements with actuals and forecast
  • Automatic business, banking and shareholder ratios based on actuals and forecast
  • Automatic reports for directors, shareholders and lenders based on actuals and forecast
  • Bespoke input section for management accounting actuals in relevant format
  • Separate input section for multiple forecast input sets
  • Clear and simple calculations
  • Advanced analysis of change functionality
  • Advanced sensitivity analysis with:
    • hundreds of input and output sets
    • all saved within the same model
    • comparison of input sets
    • comparison of output sets
  • FAST-compliant
  • Live labelling
  • Simple naming & sharing convention

What are the benefits?

The benefits include:

  • Intuitive understanding of the business
  • Fast production of reports for directors, shareholders and lenders
  • The clarity of thought from an organised business plan
  • Turbo-charging the productivity of your finance function
  • Having the reassurance that the future forecast is seeded with the current and latest management accounting actuals
  • Gain the business understanding from extensive operating and refinancing sensitivities
  • Understanding the impact of different strategies on cash flow, profitability and key performance indicators
  • Understanding the key drivers of growth of the business

Has it been done before?

Lazuli Solutions has produced strategic operating models for a variety of large UK and European businesses:

  • A regulated high speed rail company in the UK
  • A bulk and container ports enterprise in Spain
  • A Regulated electricity distribution network companies in the UK and in Finland
  • A regulated gas distribution network company in the UK
  • Multiple project finance companies such as wind farms, schools, water works, hospitals and magistrates courts in the UK
  • Media finance funds in the EU
  • A large software company in the UK
  • An automotive insurance business in the UK
 
 Finnish electricity network & distribution company

Finnish electricity network & distribution company

 Spanish container and transhipment company

Spanish container and transhipment company

 High speed rail in the UK

High speed rail in the UK

 

A historical first in European film financing

The history

In 2011, Lazuli Solutions participated in the first European feature film “slate financing” deal in Europe.

The deal was driven by Anton Capital, a boutique merchant bank in London and the client was Studio-Canal, part of Vivendi’s Canal Plus. The total investment for 30% of the film releases was €150m.

The part played by Lazuli Solutions

Lazuli Solutions specified, designed and built the financial model in Excel for this deal.

Financial close was achieved in autumn 2011 for a capital structure including bank debt and mezzanine and equity investments.

How does a ‘slate financing’ work?

A slate financing, and this one in particular, is a multi-picture financing agreement, as opposed to the European norm of single-feature bank financed deals.

In Excel terms this means a very big model able to deal with hundreds of feature films. 

Techniques in Excel have now been developed to deal with large amounts of data.  It is a feature of these slate financing deals that the model must be run repeatedly to simulate multiple outcomes.

A probability table is then constructed describing the simulated outcomes.

Lenders and investors typically require between 500 and 1,000 simulations to get comfortable with the results.

The lessons

The peculiarity of a ‘slate financing’ model is not the financial model and cash flow statements but rather the large amounts of films being described – this can exceed 100 and sometimes reach over 300.

There are various ways of dealing with repeated ‘chunks’ of data and logic such as this and each method has its pros and cons.

Parts of the process, particularly the repetitive ones, can be dealt with bespoke software engines coded in more sophisticated coding languages.

Links

 

 
 
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