Seminar Business Plan

Advanced Linguistic Pontificators

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Financial Plan

The following sections will outline the important financial data.

7.1 Important Assumptions

The following table details important financial assumptions for Advanced Linguistic Pontificators.

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 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Projected Cash Flow

The following chart and table will indicate projected cash flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $107,125 $181,000 $190,000
Subtotal Cash from Operations $107,125 $181,000 $190,000
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 $107,125 $181,000 $190,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $24,000 $36,000 $50,000
Bill Payments $23,153 $45,002 $43,397
Subtotal Spent on Operations $47,153 $81,002 $93,397
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 $47,153 $81,002 $93,397
Net Cash Flow $59,972 $99,998 $96,603
Cash Balance $67,872 $167,869 $264,473

7.3 Break-even Analysis

The Break-even Analysis is shown below.

Break-even Analysis
Monthly Revenue Break-even $3,211
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $3,211

7.4 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 $107,125 $181,000 $190,000
Direct Cost of Sales $0 $0 $0
Other $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $107,125 $181,000 $190,000
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $24,000 $36,000 $50,000
Sales and Marketing and Other Expenses $6,800 $7,800 $7,800
Depreciation $3,828 $3,828 $3,828
Leased Equipment $0 $0 $0
Utilities $2,400 $2,400 $2,400
Insurance $1,500 $1,500 $1,500
Rent $0 $0 $0
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $38,528 $51,528 $65,528
Profit Before Interest and Taxes $68,597 $129,472 $124,472
EBITDA $72,425 $133,300 $128,300
Interest Expense $0 $0 $0
Taxes Incurred $17,010 $32,368 $31,637
Net Profit $51,587 $97,104 $92,835
Net Profit/Sales 48.16% 53.65% 48.86%

7.5 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 $67,872 $167,869 $264,473
Other Current Assets $0 $0 $0
Total Current Assets $67,872 $167,869 $264,473
Long-term Assets
Long-term Assets $11,500 $11,500 $11,500
Accumulated Depreciation $3,828 $7,656 $11,484
Total Long-term Assets $7,672 $3,844 $16
Total Assets $75,544 $171,713 $264,489
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $4,556 $3,622 $3,562
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $4,556 $3,622 $3,562
Long-term Liabilities $0 $0 $0
Total Liabilities $4,556 $3,622 $3,562
Paid-in Capital $22,000 $22,000 $22,000
Retained Earnings ($2,600) $48,987 $146,091
Earnings $51,587 $97,104 $92,835
Total Capital $70,987 $168,091 $260,927
Total Liabilities and Capital $75,544 $171,713 $264,489
Net Worth $70,987 $168,091 $260,927

7.6 Business Ratios

The following table outlines some of the more important ratios from the Professional and Management Development Training industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the NAICS code, 611430.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 68.96% 4.97% 9.50%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 45.60%
Total Current Assets 89.84% 97.76% 99.99% 62.40%
Long-term Assets 10.16% 2.24% 0.01% 37.60%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 6.03% 2.11% 1.35% 43.30%
Long-term Liabilities 0.00% 0.00% 0.00% 17.30%
Total Liabilities 6.03% 2.11% 1.35% 60.60%
Net Worth 93.97% 97.89% 98.65% 39.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 68.78% 56.30% 62.71% 73.80%
Advertising Expenses 1.68% 0.99% 0.95% 5.00%
Profit Before Interest and Taxes 64.03% 71.53% 65.51% 3.20%
Main Ratios
Current 14.90 46.35 74.25 1.33
Quick 14.90 46.35 74.25 1.11
Total Debt to Total Assets 6.03% 2.11% 1.35% 60.60%
Pre-tax Return on Net Worth 96.63% 77.02% 47.70% 5.50%
Pre-tax Return on Assets 90.80% 75.40% 47.06% 14.00%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 48.16% 53.65% 48.86% n.a
Return on Equity 72.67% 57.77% 35.58% n.a
Activity Ratios
Accounts Payable Turnover 6.08 12.17 12.17 n.a
Payment Days 34 34 30 n.a
Total Asset Turnover 1.42 1.05 0.72 n.a
Debt Ratios
Debt to Net Worth 0.06 0.02 0.01 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $63,315 $164,247 $260,911 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.71 0.95 1.39 n.a
Current Debt/Total Assets 6% 2% 1% n.a
Acid Test 14.90 46.35 74.25 n.a
Sales/Net Worth 1.51 1.08 0.73 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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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 25.42% 25.00% 25.42%
Other 0 0 0
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $107,125 $181,000 $190,000
Subtotal Cash from Operations $107,125 $181,000 $190,000
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 $107,125 $181,000 $190,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $24,000 $36,000 $50,000
Bill Payments $23,153 $45,002 $43,397
Subtotal Spent on Operations $47,153 $81,002 $93,397
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 $47,153 $81,002 $93,397
Net Cash Flow $59,972 $99,998 $96,603
Cash Balance $67,872 $167,869 $264,473
Break-even Analysis
Monthly Revenue Break-even $3,211
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $3,211
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $107,125 $181,000 $190,000
Direct Cost of Sales $0 $0 $0
Other $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $107,125 $181,000 $190,000
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $24,000 $36,000 $50,000
Sales and Marketing and Other Expenses $6,800 $7,800 $7,800
Depreciation $3,828 $3,828 $3,828
Leased Equipment $0 $0 $0
Utilities $2,400 $2,400 $2,400
Insurance $1,500 $1,500 $1,500
Rent $0 $0 $0
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $38,528 $51,528 $65,528
Profit Before Interest and Taxes $68,597 $129,472 $124,472
EBITDA $72,425 $133,300 $128,300
Interest Expense $0 $0 $0
Taxes Incurred $17,010 $32,368 $31,637
Net Profit $51,587 $97,104 $92,835
Net Profit/Sales 48.16% 53.65% 48.86%
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $67,872 $167,869 $264,473
Other Current Assets $0 $0 $0
Total Current Assets $67,872 $167,869 $264,473
Long-term Assets
Long-term Assets $11,500 $11,500 $11,500
Accumulated Depreciation $3,828 $7,656 $11,484
Total Long-term Assets $7,672 $3,844 $16
Total Assets $75,544 $171,713 $264,489
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $4,556 $3,622 $3,562
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $4,556 $3,622 $3,562
Long-term Liabilities $0 $0 $0
Total Liabilities $4,556 $3,622 $3,562
Paid-in Capital $22,000 $22,000 $22,000
Retained Earnings ($2,600) $48,987 $146,091
Earnings $51,587 $97,104 $92,835
Total Capital $70,987 $168,091 $260,927
Total Liabilities and Capital $75,544 $171,713 $264,489
Net Worth $70,987 $168,091 $260,927
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 68.96% 4.97% 9.50%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 45.60%
Total Current Assets 89.84% 97.76% 99.99% 62.40%
Long-term Assets 10.16% 2.24% 0.01% 37.60%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 6.03% 2.11% 1.35% 43.30%
Long-term Liabilities 0.00% 0.00% 0.00% 17.30%
Total Liabilities 6.03% 2.11% 1.35% 60.60%
Net Worth 93.97% 97.89% 98.65% 39.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 68.78% 56.30% 62.71% 73.80%
Advertising Expenses 1.68% 0.99% 0.95% 5.00%
Profit Before Interest and Taxes 64.03% 71.53% 65.51% 3.20%
Main Ratios
Current 14.90 46.35 74.25 1.33
Quick 14.90 46.35 74.25 1.11
Total Debt to Total Assets 6.03% 2.11% 1.35% 60.60%
Pre-tax Return on Net Worth 96.63% 77.02% 47.70% 5.50%
Pre-tax Return on Assets 90.80% 75.40% 47.06% 14.00%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 48.16% 53.65% 48.86% n.a
Return on Equity 72.67% 57.77% 35.58% n.a
Activity Ratios
Accounts Payable Turnover 6.08 12.17 12.17 n.a
Payment Days 34 34 30 n.a
Total Asset Turnover 1.42 1.05 0.72 n.a
Debt Ratios
Debt to Net Worth 0.06 0.02 0.01 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $63,315 $164,247 $260,911 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.71 0.95 1.39 n.a
Current Debt/Total Assets 6% 2% 1% n.a
Acid Test 14.90 46.35 74.25 n.a
Sales/Net Worth 1.51 1.08 0.73 n.a
Dividend Payout 0.00 0.00 0.00 n.a