SmartHelping / Royalty Income Analysis / Excel
Royalty Licensing
Compare a fixed fee per sale with a percentage of sales. Forecast the licensee’s sales, review annual royalty income and present value, and track actual results against your forecast.
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See the template in action
Follow the sales forecast through the royalty comparison.
Watch the walkthrough to review the sales assumptions, royalty calculations and annual outputs. Open the screenshots below for a closer look at the workbook.
What the template includes
Evaluate the income stream behind the licensing terms.
Build a sales forecast, enter the royalty assumptions and compare the resulting fees and present values.
Up to 50 years of analysis
Evaluate royalty income over a period of up to 50 years, with annual summaries of the projected fees.
Monthly sales assumptions
Forecast total sales using monthly unit sales, sales growth and average value per sale. Adjust the growth rate and average sale value each month.
Two royalty configurations
Set a fixed fee per sale and a percentage-of-sale royalty rate, then compare the income generated by each structure.
Present value calculations
Enter your own discount rate to calculate the present value of each licensing configuration over time.
Royalty rate sensitivity table
Compare present values using up to four alternative fee-per-sale and percentage-of-sale inputs in the sensitivity table.
Annual reporting, actuals and charts
Review total fees per year by royalty type, track actuals against the forecast, and use two visualizations summarizing present value and annual fees.
Compare the fee structures
See how sales volume and sale value affect royalties.
The template compares two ways of earning licensing income from the licensee’s sales.
Fixed fee per sale
Earn a specified amount for each unit sold. The income stream depends on sales volume and the fee assumption, so changes in the average sale value do not directly increase the fee per unit.
Percentage of sales
Earn a specified percentage of sales revenue. The income stream reflects both the number of units sold and the average value per sale, along with the royalty percentage.
Cash flow timing and present value
Compare more than the total fees.
The timing of royalty income matters to its present value. Use the forecast and your chosen discount rate to compare the two income streams across the analysis period.
Review how the comparison changes
A fixed fee may produce more income initially. If average sale values rise, the percentage-based royalty may become more valuable over time. The model shows the results under your sales and fee assumptions.
Set your discount rate
Enter the discount rate you want to use for the present-value analysis. Review the discounted results alongside annual fees to understand how the timing of the income affects the comparison.
Consider different fee levels
If a proposed arrangement uses a sliding scale tied to sales volume, compare the relevant fixed-fee and percentage levels as you evaluate the terms. The sensitivity table helps show how alternative fee assumptions affect present value.
How to use the template
Turn sales assumptions into a royalty analysis.
Build the licensee’s sales forecast
Enter monthly unit sales, sales growth and average value per sale. Adjust the monthly growth and sale-value assumptions to reflect the expected sales path.
Enter the royalty terms and discount rate
Set the fixed fee per sale, percentage-of-sale rate and discount rate for the present-value calculation.
Compare annual income and present value
Review the annual summary and visualizations, then use the sensitivity table to compare alternative royalty inputs.
Track actuals against the forecast
Record actual results and compare them with the forecast to review how the royalty income develops over time.
Who this template is for
For licensing decisions driven by future sales.
In a royalty arrangement, the licensor grants the licensee rights to use intellectual property in exchange for compensation. This template focuses on the financial comparison of the royalty terms.
IP owners evaluating licensing income
Compare potential royalties from licensing patents, trademarks, copyrighted material or trade secrets using the licensee’s projected sales.
Teams comparing proposed royalty terms
Use the model to discuss how fixed fees, royalty percentages, sales growth and average sale values affect the expected income stream.
Also available in these bundles
Need more financial analysis tools?
This template is included in the Accounting bundle and the Super Smart Bundle.
Questions before you buy
A few useful details.
Which royalty structures can I compare?
Compare a fixed fee per sale with a royalty calculated as a percentage of sales. Enter your own fee and percentage assumptions.
How far into the future can the analysis run?
The template supports an analysis period of up to 50 years, with annual royalty summaries.
Can I change the sales assumptions each month?
Yes. The sales forecast uses monthly unit sales, sales growth and average value per sale, with adjustable growth rates and average sale values each month.
How is the present value calculated?
The model uses the projected royalty income stream and the discount rate you enter to calculate present value for each royalty configuration.
What does the sensitivity table compare?
It shows how the present value of each royalty structure changes with up to four alternative fee-per-sale and percentage-of-sale inputs.
Can I track actual results?
Yes. The template includes actual-versus-forecast tracking, annual fee summaries and two visualizations covering present value and total fees per year.
Put the royalty terms into numbers
Compare the income behind each fee structure.
Get the Royalty Licensing Analysis Template for $45 and evaluate fixed fees, percentage royalties and present value using your own sales assumptions.
