Childcare Model
Consumer Financial Model (Free Excel Download)
Model childcare-center economics using enrolled places, occupancy, tuition, age mix, staffing ratios, payroll, food costs, licensing, and center-level profitability.
professionals from Deloitte
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About this model
This model helps you plan a childcare centre or group of nurseries. It links enrolment across age groups, tuition, and ancillary services to the educators, facilities, meals, and supplies needed to provide quality care.
Use it to assess a new centre, an acquisition, or an expansion plan. Test occupancy, fees, staffing levels, and opening timing to understand the effect on cash flow and business value.
What every model includes
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
What's inside the Childcare Model
- Capacity inputs: Year-1 centers, new centers per year, licensed places per center, occupancy with ramp and ceiling
- Enrolment mix: infant, toddler, preschool, and school-age shares of enrolled children
- Staffing ratios: regulated children per teacher by age band
- Tuition and fees: per-place tuition by band, escalation, registration fees, government subsidy
- Cost structure: teacher salary, benefits, wage growth, admin, food, occupancy, marketing, SG&A, depreciation, tax
- Capital and working capital: maintenance capex, build-out cost per center, NWC, base-year revenue
- Valuation: WACC, terminal growth, net debt, shares outstanding
- Enrolment sheet: center roll-forward, licensed places, occupancy, enrolled children by band, teaching-staff build
How the Childcare Financial Model Works: Enrolment, Staffing Ratios and Valuation
This childcare financial model projects a multi-centre early-education operator over seven years and values it with an unlevered DCF. It connects licensed places and occupancy to enrolled children by age band, derives teaching headcount from regulated ratios, and carries the result through revenue, costs, free cash flow and enterprise value.
What Drives the Estate and Enrolment Build
The operating engine starts with the centre roll-forward: opening centres plus new greenfield openings equal closing centres, and closing centres multiplied by regulated places per centre give licensed capacity.
- Occupancy begins at a Year 1 input, ramps by a fixed number of percentage points each year, and stops at a practical ceiling, since centres rarely fill completely because of waitlist friction and mismatches between age-band capacity. Enrolled children are simply licensed places times occupancy.
- Enrolment is then divided across infant, toddler, preschool and school-age bands using mix shares, so the age profile of the estate stays visible rather than being averaged away. That matters because each band carries a different economic weight, and the model lets you flex the build pipeline and the occupancy ramp to see how quickly enrolment compounds.
The Staffing Engine and Why Labour Is Headcount-Driven
Required teachers by band come from band enrolment divided by the licensing ratio for that band, with infants the tightest and school-age the loosest.
- Total teachers is the sum across bands, and the blended children-per-teacher ratio is reported as a headline operating metric.
- The consequence is that teaching labour, the dominant cost, moves with headcount and age mix rather than sitting as a flat percentage of revenue.
- An infant-heavy enrolment therefore carries far more teachers per dollar of tuition than a preschool-heavy one, because wider ratios apply to the youngest children, where supervision and room setup are most intensive.
Revenue, Costs and Operating Leverage
Tuition is built band by band from enrolment, per-place tuition and compounded escalation, so both the infant premium and preschool volume show through. Registration and activity fees scale with total enrolment, and a government subsidy is layered on as a percentage of tuition.
- On the cost side, teaching labour follows total teachers, salary, wage growth and benefits, while admin, food, occupancy, marketing, corporate SG&A and depreciation are set as percentages of revenue. Because tuition escalates faster than wages by default, the EBITDA margin expands modestly across the horizon.
- That is the operating leverage scaled childcare platforms depend on, and it is the relationship most worth flexing when testing an expansion plan.
Free Cash Flow, Valuation and Practical Use
The cash flow bridge starts with EBIT, applies unlevered tax to reach NOPAT, adds depreciation, and deducts maintenance capex as a percentage of revenue plus growth capex for the year's new centres. Working capital is treated as favourable because tuition is billed in advance.
- Unlevered free cash flow is discounted at WACC, and the valuation sums the present value of explicit cash flows and a Gordon-growth terminal value to reach enterprise value, then subtracts net debt for equity value and value per share, with implied EV/EBITDA shown. The dashboard gathers centres, enrolment, occupancy, child-to-teacher ratio, revenue, EBITDA and value per share.
- Use the model to compare a new centre, an acquisition or an expansion, adjusting occupancy, fees, staffing and opening timing. It is an unlevered valuation, so financing structure is excluded by design.
Formatted to IB standards
Named theme colors repaint the whole workbook in one click, on top of an investment-banking structure with clear input, output, and cross-sheet reference styling - brand-ready, institutional-grade, and fully auditable.
Created by ex-finance professionals
Hey, I’m Alex and I created Finamodel.
Over my years in the finance industry I kept building the same models over and over again. Same structure, same assumptions, different logo. So I started building frameworks to turn them into clean, reusable templates.
Every model here is one I’d actually use for a client, and I personally vet each one before it goes up.
I’m not an expert in every industry, but I’ve built enough models to know what belongs in one. And when something is completely foreign to me, I reach out to my network for experts to work on our models with us.
Having a template library on hand cuts a first build from hours to minutes.
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Frequently asked
What is a childcare model?+
A childcare model captures the seven-year operating economics and intrinsic value of a multi-center childcare (daycare / early-education) operator. It rolls a center count forward, converts licensed places and occupancy into enrolled children by age band, derives a regulated teaching-staff headcount from per-band ratios, prices tuition by band plus registration fees and a government subsidy, runs the cost stack to EBITDA, and discounts an unlevered free-cash-flow stream to enterprise value, equity value, and value per share. It is how a private-equity associate, operator CFO, or lender values a childcare platform.
Why are staff-to-child ratios so important?+
Licensing sets a maximum number of children per teacher for each age band, typically about four-to-one for infants and far looser for school-age, so the staffing cost of a center is driven by its age mix, not just its headcount. The model derives required teachers band by band and reports a blended child-per-teacher ratio, which is why the infant-heavy end of the mix carries more labour per dollar of tuition than preschool.
Why is teaching labour headcount-driven instead of a percent of revenue?+
Teaching labour is the largest cost in a childcare center and is set by enrolment, mix, and the licensing ratios rather than by revenue, so the model builds it from total teachers times salary times a wage-growth factor and a benefits load. Because tuition escalates faster than wages by default, the EBITDA margin expands modestly over the horizon, the operating leverage scaled operators rely on.
Why an unlevered DCF instead of an EBITDA multiple?+
Childcare runs healthy EBITDA margins but carries real depreciation and capex on leasehold fit-out and FF&E, so EBITDA overstates cash. The model bridges to unlevered free cash flow, NOPAT plus depreciation, less capex, less the change in working capital, which is favourable because tuition is collected in advance, and discounts it at a WACC, then adds a Gordon-growth terminal value. The implied EV/EBITDA falls out as a sanity check rather than as the valuation input.
Can I make it a levered or single-center model?+
The template is a single-entity unlevered DCF. For an equity-IRR view, add a debt schedule and bridge to levered free cash flow; for a single center, set the estate to one center and size places, occupancy, and the age mix to that location. The net-debt line already bridges enterprise value to equity value, so a financing layer slots in cleanly.
Have more financial modelling questions? Contact us
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