Operational Stream

Component 2: Cash Inflows (Operating Financials)

Component 2 models the operational performance of your asset over the holding period (typically 10 years). It calculates revenue streams, departmental expenses, fixed overheads, and working capital requirements to produce a comprehensive 10-year Profit & Loss (P&L) statement and key metrics like NOI and EBITDA.

Overview

While Component 1 focuses on the capital expenditure (CapEx) to build the asset, Component 2 focuses on the operational expenditure (OpEx) and revenue generation (OpInc). The system automatically suggests benchmark percentages for expenses based on your asset type, segment, and location, but all fields are fully editable.

What This Component Produces

  • •10-Year P&L Statement: Detailed yearly breakdown of revenues and expenses.
  • •Net Operating Income (NOI): Revenue minus all operating expenses (before debt service and depreciation).
  • •EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization.
  • •Working Capital Schedule: Accounts Receivable and Payable impacts on cash flow.

Step-by-Step Walkthrough

Step 1: Primary Revenue Drivers

Define the core volume and pricing metrics that drive your top-line revenue. The inputs change based on your asset type:

  • Hotels: Number of Keys (Rooms), Year 1 ADR (Average Daily Rate), Occupancy %, and annual inflation/escalation rates.
  • Retail/Office: Gross Leasable Area (GLA), Year 1 Rent (psf/psm), Lease-up period, and stabilized occupancy.
  • Residential: Unit mix, average rent per unit, and vacancy rates.
  • Warehouse: Total Leasable Area (sqm), Base Rent (psf/psm), Loading Dock count, Clear Height (m), and specialized storage rates.
  • Data Centre: IT Load Capacity (MW), Power Price (per kWh), Rack Count, Cooling Capacity, and PUE (Power Usage Effectiveness) target.

Note: The system automatically calculates the stabilized metrics based on your Year 1 inputs and escalation rates.

Step 2: Revenue Mix & Other Income

Break down your total revenue into its constituent streams. For a hotel, this includes the percentage split between Rooms, Food & Beverage, Spa, Telecom, and other departments.

For non-hospitality assets, this step captures ancillary income such as CAM recoveries, parking fees, advertising/signage income, and late fees. The sum of all percentages must equal 100%.

Step 3: Direct Costs (Departmental Expenses)

Enter the variable costs directly associated with generating revenue in each department. These are typically expressed as a percentage of that department's revenue.

  • Payroll & Related: Salaries, benefits, and training for department staff.
  • Cost of Sales: Specifically for F&B (cost of food and beverage).
  • Other Expenses: Operating supplies, linen, uniforms, and commissions.

Step 4: Undistributed & Fixed Expenses

These are the overhead costs required to run the property, regardless of occupancy or sales volume.

  • Administrative & General (G&A): Executive office, legal, and insurance.
  • Sales & Marketing: Advertising, PR, and sales team salaries.
  • Property Operations & Maintenance: Engineering, repairs, and groundskeeping.
  • Utilities: Electricity, water, gas, and telecom infrastructure.
  • Management Fees: Base fee (typically % of gross revenue) and Incentive fee (% of EBITDA or GOP).
  • Renovation Provision (FF&E Reserve): Annual set-aside for future capital replacements (e.g., 3-5% of revenue).

Step 5: Depreciation & Working Capital

Configure the non-cash accounting entries and cash flow timing assumptions.

Depreciation Assumptions

  • Construction Useful Life (e.g., 25-40 years)
  • FF&E Useful Life (e.g., 7 years)
  • FF&E Renovation Trigger (e.g., 50% replacement at Year 6)

Working Capital

  • Accounts Receivable (e.g., 30 days / 1 month of revenue)
  • Accounts Payable (e.g., 30 days / 1 month of expenses)

Outputs & Key Metrics

Upon completing Component 2, FeasiBuild generates a dynamic 10-year projection table. Key metrics calculated include:

MetricDefinition
Total RevenueSum of all departmental and ancillary income.
GOP (Gross Operating Profit)Total Revenue minus Departmental and Undistributed Expenses.
NOI (Net Operating Income)GOP minus Management Fees, Property Taxes, and Insurance.
EBITDANOI minus Ground Rent (if applicable). Used for debt service coverage calculations.
← Component 1: Cash OutflowsComponent 3: Project IRR →