Catholic School Development Foundation
Financial Plan
Our financial plan is based on conservative estimates and assumptions. We will need to plan on initial investment to make the financials work.
7.1 Important Assumptions
The following table summarizes key financial assumptions. Retainer fees in this industry are generally billed in advance of service.
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.00% | 8.00% | 8.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 2.50% | 0.00% | 2.50% |
| Other | 0 | 0 | 0 |
7.2 Key Financial Indicators
The following benchmark chart indicates our key financial indicators for the first three years.
7.3 Break-even Analysis
The following chart and table summarizes the break-even analysis, assuming two full-time consultants in the second year of operations.
| Break-even Analysis | |
| Monthly Revenue Break-even | $8,593 |
| Assumptions: | |
| Average Percent Variable Cost | 4% |
| Estimated Monthly Fixed Cost | $8,225 |
7.4 Projected Surplus or Deficit
An annual pro-forma income statement is included here.
| Surplus and Deficit | |||
| Year 1 | Year 2 | Year 3 | |
| Funding | $140,000 | $420,000 | $660,000 |
| Direct Cost | $6,000 | $14,000 | $16,000 |
| Other | $0 | $0 | $0 |
| Total Direct Cost | $6,000 | $14,000 | $16,000 |
| Gross Surplus | $134,000 | $406,000 | $644,000 |
| Gross Surplus % | 95.71% | 96.67% | 97.58% |
| Expenses | |||
| Payroll | $65,000 | $260,000 | $492,000 |
| Sales and Marketing and Other Expenses | $21,000 | $28,000 | $33,000 |
| Depreciation | $0 | $0 | $0 |
| Insurance | $3,600 | $7,200 | $14,400 |
| Rent | $0 | $0 | $10,000 |
| Other | $0 | $0 | $0 |
| Insurance | $0 | $0 | $0 |
| Payroll Taxes | $9,100 | $36,400 | $68,880 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $98,700 | $331,600 | $618,280 |
| Surplus Before Interest and Taxes | $35,300 | $74,400 | $25,720 |
| EBITDA | $35,300 | $74,400 | $25,720 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | ($2,145) | $0 | $643 |
| Net Surplus | $37,445 | $74,400 | $25,077 |
| Net Surplus/Funding | 26.75% | 17.71% | 3.80% |
7.5 Projected Cash Flow
Cash flow projections are critical to our success. The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month and the other representing the monthly balance. The annual cash flow figures are included in the following table. Consulting is always a feast or famine venture. It is extremely difficult to consistently match demand and supply, especially in firms of five or less consultants. (Beyond this, it evens out.) Therefore, note that a large cash balance in essential to operate through the dry months.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Funding | $105,000 | $315,000 | $495,000 |
| Cash from Receivables | $25,167 | $85,333 | $148,143 |
| Subtotal Cash from Operations | $130,167 | $400,333 | $643,143 |
| 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 | $130,167 | $400,333 | $643,143 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $65,000 | $260,000 | $492,000 |
| Bill Payments | $34,462 | $81,658 | $138,212 |
| Subtotal Spent on Operations | $99,462 | $341,658 | $630,212 |
| 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 | $99,462 | $341,658 | $630,212 |
| Net Cash Flow | $30,705 | $58,676 | $12,931 |
| Cash Balance | $67,105 | $125,781 | $138,712 |
7.6 Projected Balance Sheet
The following table shows the project balance sheet.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $67,105 | $125,781 | $138,712 |
| Accounts Receivable | $9,833 | $29,500 | $46,357 |
| Other Current Assets | $3,000 | $3,000 | $3,000 |
| Total Current Assets | $79,938 | $158,281 | $188,069 |
| Long-term Assets | |||
| Long-term Assets | $0 | $0 | $0 |
| Accumulated Depreciation | $0 | $0 | $0 |
| Total Long-term Assets | $0 | $0 | $0 |
| Total Assets | $79,938 | $158,281 | $188,069 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $3,093 | $7,036 | $11,747 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $11,400 | $11,400 | $11,400 |
| Subtotal Current Liabilities | $14,493 | $18,436 | $23,147 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $14,493 | $18,436 | $23,147 |
| Paid-in Capital | $61,400 | $61,400 | $61,400 |
| Accumulated Surplus/Deficit | ($33,400) | $4,045 | $78,445 |
| Surplus/Deficit | $37,445 | $74,400 | $25,077 |
| Total Capital | $65,445 | $139,845 | $164,922 |
| Total Liabilities and Capital | $79,938 | $158,281 | $188,069 |
| Net Worth | $65,445 | $139,845 | $164,922 |
7.7 Standard Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 8299, Schools & Educational Services, NEC, are shown for comparison.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Funding Growth | 0.00% | 200.00% | 57.14% | 9.50% |
| Percent of Total Assets | ||||
| Accounts Receivable | 12.30% | 18.64% | 24.65% | 15.50% |
| Other Current Assets | 3.75% | 1.90% | 1.60% | 45.60% |
| Total Current Assets | 100.00% | 100.00% | 100.00% | 62.40% |
| Long-term Assets | 0.00% | 0.00% | 0.00% | 37.60% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 18.13% | 11.65% | 12.31% | 43.30% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 17.30% |
| Total Liabilities | 18.13% | 11.65% | 12.31% | 60.60% |
| Net Worth | 81.87% | 88.35% | 87.69% | 39.40% |
| Percent of Funding | ||||
| Funding | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Surplus | 95.71% | 96.67% | 97.58% | 0.00% |
| Selling, General & Administrative Expenses | 73.50% | 81.81% | 95.95% | 73.80% |
| Advertising Expenses | 3.57% | 2.38% | 1.82% | 5.00% |
| Surplus Before Interest and Taxes | 25.21% | 17.71% | 3.90% | 3.20% |
| Main Ratios | ||||
| Current | 5.52 | 8.59 | 8.12 | 1.33 |
| Quick | 5.52 | 8.59 | 8.12 | 1.11 |
| Total Debt to Total Assets | 18.13% | 11.65% | 12.31% | 60.60% |
| Pre-tax Return on Net Worth | 53.94% | 53.20% | 15.60% | 5.50% |
| Pre-tax Return on Assets | 44.16% | 47.01% | 13.68% | 14.00% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Surplus Margin | 26.75% | 17.71% | 3.80% | n.a |
| Return on Equity | 57.22% | 53.20% | 15.21% | n.a |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 3.56 | 3.56 | 3.56 | n.a |
| Collection Days | 56 | 68 | 84 | n.a |
| Accounts Payable Turnover | 12.14 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 22 | 24 | n.a |
| Total Asset Turnover | 1.75 | 2.65 | 3.51 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.22 | 0.13 | 0.14 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $65,445 | $139,845 | $164,922 | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Funding | 0.57 | 0.38 | 0.28 | n.a |
| Current Debt/Total Assets | 18% | 12% | 12% | n.a |
| Acid Test | 4.84 | 6.99 | 6.12 | n.a |
| Funding/Net Worth | 2.14 | 3.00 | 4.00 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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