Scholarship Assist

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Scholarship Consulting Business Plan

Financial Plan

The following sections will outline important financial information.

8.1 Important Assumptions

The following table details important Financial Assumptions.

General Assumptions
Year 1 Year 2 Year 3
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 30.00% 30.00% 30.00%
Other 0 0 0

8.2 Break-even Analysis

The Break-even Analysis is shown below.

Break-even Analysis
Monthly Revenue Break-even $9,460
Assumptions:
Average Percent Variable Cost 14%
Estimated Monthly Fixed Cost $8,136

8.3 Projected Profit and Loss

The following table will indicate Projected Profit and Loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $89,192 $172,589 $232,508
Direct Cost of Sales $12,487 $24,162 $32,551
Other Costs of Sales $0 $0 $0
Total Cost of Sales $12,487 $24,162 $32,551
Gross Margin $76,705 $148,426 $199,957
Gross Margin % 86.00% 86.00% 86.00%
Expenses
Payroll $67,500 $96,000 $118,000
Sales and Marketing and Other Expenses $4,200 $5,500 $6,000
Depreciation $2,004 $2,004 $2,004
Rent $7,200 $7,200 $7,200
Utilities $2,400 $2,400 $2,400
Insurance $2,400 $2,400 $2,400
Payroll Taxes $10,125 $14,400 $17,700
Other $1,800 $1,800 $1,800
Total Operating Expenses $97,629 $131,704 $157,504
Profit Before Interest and Taxes ($20,924) $16,722 $42,453
EBITDA ($18,920) $18,726 $44,457
Interest Expense $0 $0 $0
Taxes Incurred $0 $5,017 $12,736
Net Profit ($20,924) $11,706 $29,717
Net Profit/Sales -23.46% 6.78% 12.78%

8.4 Projected Cash Flow

The following table and chart will indicate Projected Cash Flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $89,192 $172,589 $232,508
Subtotal Cash from Operations $89,192 $172,589 $232,508
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 $89,192 $172,589 $232,508
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $67,500 $96,000 $118,000
Bill Payments $36,201 $62,122 $81,151
Subtotal Spent on Operations $103,701 $158,122 $199,151
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 $103,701 $158,122 $199,151
Net Cash Flow ($14,509) $14,467 $33,357
Cash Balance $7,841 $22,308 $55,665

8.5 Projected Balance Sheet

The following table will indicate the Projected Balance Sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $7,841 $22,308 $55,665
Other Current Assets $1,300 $1,300 $1,300
Total Current Assets $9,141 $23,608 $56,965
Long-term Assets
Long-term Assets $10,000 $10,000 $10,000
Accumulated Depreciation $2,004 $4,008 $6,012
Total Long-term Assets $7,996 $5,992 $3,988
Total Assets $17,137 $29,600 $60,953
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $4,411 $5,168 $6,804
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $4,411 $5,168 $6,804
Long-term Liabilities $0 $0 $0
Total Liabilities $4,411 $5,168 $6,804
Paid-in Capital $45,000 $45,000 $45,000
Retained Earnings ($11,350) ($32,274) ($20,568)
Earnings ($20,924) $11,706 $29,717
Total Capital $12,726 $24,432 $54,149
Total Liabilities and Capital $17,137 $29,600 $60,953
Net Worth $12,726 $24,432 $54,149

8.6 Business Ratios

The following table indicates important Business Ratios for both ScholarshipAssist as well as the industry as a whole. Please note that any material variances between ScholarshipAssist's ratios and the industry rations can be explained by the fact that the services offered by ScholarshipAssist are quite new and are not duplicated by others therefore it is reasonable to expect that the ratios are not always consistent with the industry as a whole.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 93.50% 34.72% 8.15%
Percent of Total Assets
Other Current Assets 7.59% 4.39% 2.13% 35.03%
Total Current Assets 53.34% 79.76% 93.46% 55.79%
Long-term Assets 46.66% 20.24% 6.54% 44.21%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 25.74% 17.46% 11.16% 25.11%
Long-term Liabilities 0.00% 0.00% 0.00% 22.00%
Total Liabilities 25.74% 17.46% 11.16% 47.11%
Net Worth 74.26% 82.54% 88.84% 52.89%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 86.00% 86.00% 86.00% 100.00%
Selling, General & Administrative Expenses 109.46% 79.22% 73.22% 77.99%
Advertising Expenses 0.00% 0.00% 0.00% 1.85%
Profit Before Interest and Taxes -23.46% 9.69% 18.26% 3.35%
Main Ratios
Current 2.07 4.57 8.37 1.73
Quick 2.07 4.57 8.37 1.30
Total Debt to Total Assets 25.74% 17.46% 11.16% 59.92%
Pre-tax Return on Net Worth -164.42% 68.45% 78.40% 6.16%
Pre-tax Return on Assets -122.10% 56.50% 69.65% 15.38%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -23.46% 6.78% 12.78% n.a
Return on Equity -164.42% 47.91% 54.88% n.a
Activity Ratios
Accounts Payable Turnover 9.21 12.17 12.17 n.a
Payment Days 27 28 26 n.a
Total Asset Turnover 5.20 5.83 3.81 n.a
Debt Ratios
Debt to Net Worth 0.35 0.21 0.13 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $4,730 $18,440 $50,161 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.19 0.17 0.26 n.a
Current Debt/Total Assets 26% 17% 11% n.a
Acid Test 2.07 4.57 8.37 n.a
Sales/Net Worth 7.01 7.06 4.29 n.a
Dividend Payout 0.00 0.00 0.00 n.a