Case studies.

Executive summary

This case study explains how a financial model was built for a space sector company raising funds for expansion. The French-based company, a specialist in optical ground equipment, sought capital to grow internationally. The financial model provided investors with a clear picture of the company’s financial position, growth prospects, and funding needs, helping them assess viability and profitability. This report describes the steps taken, challenges faced, and insights gained.

1. Company overview

After strong domestic success, the company aimed to expand globally and secure major international contracts. To achieve this, it needed a robust financial model to guide funding requirements and strategic decisions.

2. Objectives of the financial model

  • Capital requirements: Define the funding needed for expansion.
  • Financial roadmap: Provide five-year forecasts for revenue, expenses, cash flow, and profitability.
  • Scalability: Show how expansion, including additional manufacturing facilities, could drive growth.
  • Investor tool: Enable assessment of return on investment, payback period, and financial milestones.

3. Building the financial model

Step 1 – Data collection and assumptions: Historical financials were analysed to identify trends. Expansion plans were translated into assumptions for the model’s structure.

Step 2 – Revenue model development: Sales forecasts were prepared for each product line, with timing and collection assumptions built in. Dependencies, such as direct costs and staffing linked to revenue, were established. Geographic expansion ‘modules’ allowed flexible timing adjustments.

Step 3 – Cost structure and profitability: Fixed costs included manufacturing sites and R&D; variable costs included operations, maintenance, marketing, and sales.

Step 4 – Cash flow projections: The model included monthly-to-annual reporting options, capital expenditure plans, and funding schedules.

Step 5 – Sensitivity and risk analysis: Multiple scenarios could be run to reflect uncertainty in growth plans and market conditions.

4. Results and outcome

The model clearly showed the company’s financial trajectory and funding requirements, supporting its capital raising process.

5. Conclusion

A well-structured financial model was central to securing investment. It gave transparency on financial health, demonstrated scalability, and enabled informed decision-making by both the company and potential investors.