Financial Model For The Trading Of Digital Assets            An Analysis Of The Financial Model For The Trading Of Digital Assets



Myinvestorchoice prepares the following case study, which describes a company that provides regulatory and technology stack solutions for digital asset trading. With the help of an Excel financial model, the client company plans to raise funds for its operations and expansion.

An overview of the process and analysis techniques used to prepare a financial model for digital asset trading is presented in this case study. Furthermore, our experts have prepared a fully customizable financial model. When the user adjusts the input values, the model will automatically update.

Aims And Objectives Of The Company 

An important feature of the client’s business is that they provide reliable assistance to the trading of digital assets in terms of regulations and technology. Our primary goal is to assist businesses in the fast-growing digital asset industry in navigating the complex rules and regulations that govern the industry. The client company also provides advanced technology solutions to enhance the efficiency and effectiveness of business operations. It is the ultimate objective of our client company to help these businesses stay compliant while utilizing the latest technological advances.

Providing Services To Clients

Due to the company’s experience and expertise in both regulatory compliance and technology integration, the client is able to provide comprehensive solutions tailored specifically to the unique requirements of digital asset trading platforms. As part of the services offered by our client, we recruit a team of experienced professionals who are knowledgeable of the ever-changing regulatory environment and are adept at assisting clients to achieve compliance with the regulations and standards of the industry.

Identifying Challenges 

  • We prepared the financial statements of each of the companies in the client company, which is a group of companies.
  • Additionally, our client company wanted to assess the financial standing of the Group Company as a whole. 
  • In order to prepare a financial forecast for the next five years, our client requested that we develop a financial model forecast.
  • Each company’s depreciation and asset calculation was to be calculated separately by our client company. 

Possible Solutions 

As part of the project, our team of experts prepared financial statements for each of the companies, including advanced formulas and linkages to enable the financial statements to be adjusted with a few clicks within the input sheet. 

Furthermore, we prepared an Overview Statement to present the company’s financial performance collectively. The overview statement is a summary of all the financial statements of the parent company. 

In order to allow the changes to be made to the input sheet, we implemented complex formulas. From the input sheet for the depreciation table, asset details can be adjusted for each company, and the asset calculation sheet will update automatically. As the client desired a clear picture of the asset position in each of his companies, we calculated depreciation separately for each. 

Currently Working Nodes

  • Copying the blockchain and storing it 
  • The process of validating transactions 
  • Block and transaction propagation 
  • Creating blocks and mining 
  • Contributing to consensus-building

As part of the process of validating and verifying transactions and blocks, nodes maintain a copy of the entire blockchain. It is the responsibility of nodes to perform the following tasks: 

As nodes are an essential part of blockchain technology, we have included their work in our financial model. We have developed the customized financial model for the blockchain business and have included the complex workings for master nodes and sub-nodes so that the client company will not miss any details and will be able to fully utilize it.  

Achieved Results

By using our financial model, the client was able to predict and plan for their financial performance for the next five years. The model included projections for their total revenue, expenses, and cash flow. To determine how different aspects of a client’s financial performance are affected, the study examined factors such as the evaluation of projects, the use of money, financial ratios and breakeven analysis.

The following financial statements and future projections provide a detailed understanding of the forecasted financial situation.

Highlights Of The Financial Year

Statement Of Income

It is important for a company to have a substantial income statement. In this report, the company’s revenues, costs of goods sold, expenses, and net profit are summarized. For the client, Myinvestorchoice experts prepared an income statement with complex logic and formula structure that could be adjusted directly from the input sheet. 

Moreover, since the client company is a group of companies, our financial analysts prepared income statements for each company within the group. Besides summarizing the company’s performance as a whole, we prepared a consolidated income statement. 

Statement Of Cash Flows

We analyzed the cash position of our client’s blockchain startup business using a cash flow statement, which details cash inflows and outflows over the next five years. The business invested in the acquisition of assets during its first year of operation, resulting in cash outflows from investing activities. Despite this, the company’s overall cash flow position is satisfactory since it has received cash inflows throughout the period analyzed.

The Balance Sheet 

Balance sheets provide an overview of a company’s financial condition. It represents the resources, which are a company’s assets, and the funding sources for those assets, which is its capital.  

Considering that the client company is a group of companies, our financial analysts utilized their skills and techniques to represent each company’s balance sheet and a consolidated balance sheet That Represented The Parent Company’s Financial Position. 

An Overview Of Depreciation 

A cumulative depreciation table was provided to our client company. According to the depreciation table, depreciation is being applied to the assets. The asset calculation included all the details regarding the assets being purchased, written off, and profit and loss on asset disposition. 

Ratios Of Financial Health 

An organization’s financial health and performance are evaluated using financial ratios. Our financial experts have prepared the financial ratios analysis sheet to provide an overview of the company’s performance.  The financial ratio analysis sheet includes important ratios to measure the profitability of the company, such as gross profit margins and net profit margins. To measure the company’s liquidity position, we also calculated liquidity ratios. 

Final Thoughts

In recent years, blockchain technology has grown rapidly due to various factors, including security, transparency, payments, smart contracts, digital identities, etc. It is anticipated that the blockchain industry will grow at an annual rate of 56.3% by 2029 and reach a value of $163.83 billion. We are living in the future. In the near future, most people will prefer blockchain and cryptocurrencies over traditional systems. 

A team of Myinvestorchoice financial analysts worked on this project and prepared an advanced and complex financial model for our client’s digital asset trading business. Providing great business and financial solutions to our clients is always a top priority for our team.