Computer Consulting Business Plan

Calico Computer Consulting

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Financial Plan

7.0 Financial Plan

The following sections include the annual estimates for the standard set of financial tables. Detailed monthly pro-forma tables are included in the appendix.

7.1 Important Assumptions

This information is presented in the table below.

General Assumptions

General Assumptions
	FY 2000	FY 2001	FY 2002
Plan Month	1	2	3
Current Interest Rate	10.00%	10.00%	10.00%
Long-term Interest Rate	10.00%	10.00%	10.00%
Tax Rate	25.42%	25.00%	25.42%
Other	0	0	0

7.2 Key Financial Indicators

This information is presented in the chart below.

Benchmarks



7.3 Break-even Analysis

The following table and chart summarize the break-even analysis for Calico Computer Consulting. Fixed costs are minimal, consisting mostly of rent and utilities for the home office. Variable costs are assumed as 13% of sales, an average figure provided by sources within the consulting field.

Break-even Analysis



Break-even Analysis

Break-even Analysis
Monthly Units Break-even	15
Monthly Revenue Break-even	$1,141
Assumptions:
Average Per-Unit Revenue	$75.00
Average Per-Unit Variable Cost	$10.00
Estimated Monthly Fixed Cost	$989

7.4 Projected Profit and Loss

This information is presented in the table below. The owner's salary is represented in the Sales Forecast table as Direct Unit Cost and appear here as Direct Cost of Sales. Payroll Tax is computed using that figure.

Profit and Loss

Pro Forma Profit and Loss
	FY 2000	FY 2001	FY 2002
Sales	$49,500	$90,000	$93,600
Direct Cost of Sales	$6,598	$11,997	$12,477
Other	$0	$0	$0
	------------	------------	------------
Total Cost of Sales	$6,598	$11,997	$12,477
Gross Margin	$42,902	$78,003	$81,123
Gross Margin %	86.67%	86.67%	86.67%
Expenses
Payroll	$0	$0	$0
Sales and Marketing and Other Expenses	$2,475	$4,500	$4,680
Depreciation	$0	$0	$0
Leased Equipment	$0	$0	$0
Utilities	$1,500	$125	$125
Insurance	$1,800	$2,000	$2,200
Rent	$5,100	$5,100	$5,100
Payroll Taxes	$990	$1,800	$1,872
Other	$0	$0	$0
	------------	------------	------------
Total Operating Expenses	$11,865	$13,525	$13,977
Profit Before Interest and Taxes	$31,037	$64,478	$67,147
EBITDA	$31,037	$64,478	$67,147
Interest Expense	$0	$0	$0
Taxes Incurred	$7,760	$16,120	$17,066
Net Profit	$23,277	$48,359	$50,080
Net Profit/Sales	47.02%	53.73%	53.50%

Profit Monthly



Profit Yearly



Gross Margin Monthly



Gross Margin Yearly



7.5 Projected Cash Flow

This information is presented in the chart and table below.

Cash Flow

Pro Forma Cash Flow
	FY 2000	FY 2001	FY 2002
Cash Received
Cash from Operations
Cash Sales	$12,375	$22,500	$23,400
Cash from Receivables	$26,168	$58,535	$69,403
Subtotal Cash from Operations	$38,543	$81,035	$92,803
Additional Cash Received
Sales Tax, VAT, HST/GST Received	$0	$0	$0
New Current Borrowing	$0	$0	$0
New Other Liabilities (interest-free)	$0	$0	$0
New Long-term Liabilities	$0	$0	$0
Sales of Other Current Assets	$0	$0	$0
Sales of Long-term Assets	$0	$0	$0
New Investment Received	$0	$0	$0
Subtotal Cash Received	$38,543	$81,035	$92,803
Expenditures	FY 2000	FY 2001	FY 2002
Expenditures from Operations
Cash Spending	$0	$0	$0
Bill Payments	$22,739	$41,702	$43,365
Subtotal Spent on Operations	$22,739	$41,702	$43,365
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out	$0	$0	$0
Principal Repayment of Current Borrowing	$0	$0	$0
Other Liabilities Principal Repayment	$0	$0	$0
Long-term Liabilities Principal Repayment	$0	$0	$0
Purchase Other Current Assets	$0	$0	$0
Purchase Long-term Assets	$0	$0	$0
Dividends	$0	$0	$0
Subtotal Cash Spent	$22,739	$41,702	$43,365
Net Cash Flow	$15,803	$39,332	$49,438
Cash Balance	$16,228	$55,560	$104,998

Cash



7.6 Projected Balance Sheet

This information is presented in the table below.

Balance Sheet

Pro Forma Balance Sheet
	FY 2000	FY 2001	FY 2002
Assets
Current Assets
Cash	$16,228	$55,560	$104,998
Accounts Receivable	$10,958	$19,923	$20,720
Other Current Assets	$0	$0	$0
Total Current Assets	$27,186	$75,483	$125,718
Long-term Assets
Long-term Assets	$0	$0	$0
Accumulated Depreciation	$0	$0	$0
Total Long-term Assets	$0	$0	$0
Total Assets	$27,186	$75,483	$125,718
Liabilities and Capital	FY 2000	FY 2001	FY 2002
Current Liabilities
Accounts Payable	$3,484	$3,423	$3,577
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$3,484	$3,423	$3,577
Long-term Liabilities	$0	$0	$0
Total Liabilities	$3,484	$3,423	$3,577
Paid-in Capital	$2,050	$2,050	$2,050
Retained Earnings	($1,625)	$21,652	$70,011
Earnings	$23,277	$48,359	$50,080
Total Capital	$23,702	$72,061	$122,141
Total Liabilities and Capital	$27,186	$75,483	$125,718
Net Worth	$23,702	$72,061	$122,141

7.7 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 7379, Computer Related Services, are shown for comparison.

Ratios

Ratio Analysis
	FY 2000	FY 2001	FY 2002	Industry Profile
Sales Growth	0.00%	81.82%	4.00%	7.20%
Percent of Total Assets
Accounts Receivable	40.31%	26.39%	16.48%	21.70%
Other Current Assets	0.00%	0.00%	0.00%	46.70%
Total Current Assets	100.00%	100.00%	100.00%	71.90%
Long-term Assets	0.00%	0.00%	0.00%	28.10%
Total Assets	100.00%	100.00%	100.00%	100.00%
Current Liabilities	12.81%	4.53%	2.85%	51.40%
Long-term Liabilities	0.00%	0.00%	0.00%	19.10%
Total Liabilities	12.81%	4.53%	2.85%	70.50%
Net Worth	87.19%	95.47%	97.15%	29.50%
Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	86.67%	86.67%	86.67%	0.00%
Selling, General & Administrative Expenses	38.14%	31.44%	31.37%	80.70%
Advertising Expenses	5.00%	5.00%	5.00%	1.20%
Profit Before Interest and Taxes	62.70%	71.64%	71.74%	1.70%
Main Ratios
Current	7.80	22.05	35.15	1.27
Quick	7.80	22.05	35.15	1.01
Total Debt to Total Assets	12.81%	4.53%	2.85%	70.50%
Pre-tax Return on Net Worth	130.95%	89.48%	54.97%	3.50%
Pre-tax Return on Assets	114.17%	85.42%	53.41%	11.80%
Additional Ratios	FY 2000	FY 2001	FY 2002
Net Profit Margin	47.02%	53.73%	53.50%	n.a
Return on Equity	98.21%	67.11%	41.00%	n.a
Activity Ratios
Accounts Receivable Turnover	3.39	3.39	3.39	n.a
Collection Days	55	83	106	n.a
Accounts Payable Turnover	7.53	12.17	12.17	n.a
Payment Days	27	30	29	n.a
Total Asset Turnover	1.82	1.19	0.74	n.a
Debt Ratios
Debt to Net Worth	0.15	0.05	0.03	n.a
Current Liab. to Liab.	1.00	1.00	1.00	n.a
Liquidity Ratios
Net Working Capital	$23,702	$72,061	$122,141	n.a
Interest Coverage	0.00	0.00	0.00	n.a
Additional Ratios
Assets to Sales	0.55	0.84	1.34	n.a
Current Debt/Total Assets	13%	5%	3%	n.a
Acid Test	4.66	16.23	29.35	n.a
Sales/Net Worth	2.09	1.25	0.77	n.a
Dividend Payout	0.00	0.00	0.00	n.a