Education Center Financial Model

Financial Model Education Center Kuwait www.ziaahmed.org Income Statement-Profit and Loss Statement 2005 Revenue Cost of Revenue Student Cost of Revenue Head Wise H R Cost Direct External Expert Cost Internal Travelling Cost Rent,Rates, Taxes Utilities H R Cost Overheads Administrative Expenses Marketing and Promotion Royalty and Know How Total Cost of Sales EBITDA Depreciation Amortization 7,500 EBIT Interest on Term Loans Interest on borrowings for Working Capital Guarantee Commission Other Total Financial Expenses Earning Before Tax Provision for Tax 1,140,189 39,907 177,834 1,082,149 37,875 133,375 1,511,784 52,912 88,917 1,986,500 69,528 44,458 2,568,246 89,889 120,800 34,303 2006 177,161 60,208 2007 1,679,500 4,620 130,161 52,982 89,540 52,150 84,000 10,800 194,110 2008 2,023,400 5,567 156,814 62,139 108,076 63,325 100,800 12,960 194,110 69,840 38,880 43,200 855,711 1,167,689 7,500 20,000 27,500 1,140,189 2009 2,456,400 6,739 190,371 73,564 131,976 76,675 120,960 15,552 194,110 83,808 46,656 51,840 992,251 1,464,149 184,167 20,000 204,167 1,259,982 177,834 2010 3,005,500 8,237 232,926 88,162 162,360 95,300 145,152 18,662 194,110 100,570 55,987 62,208 1,163,674 1,841,826 176,667 20,000 196,667 1,645,159 133,375 2011 3,633,200 9,950 281,573 104,826 196,088 115,475 174,182 22,395 194,110 120,684 67,185 74,650 1,361,116 2,272,084 176,667 20,000 196,667 2,075,417 88,917 2012 4,393,400 12,012 340,489 124,903 238,268 140,000 209,019 26,874 194,110 144,820 80,622 89,580 1,600,696 2,792,704 160,000 20,000 180,000 2,612,704 44,458 61,299 77,061 58,200 32,400 36,000 95,602 25,198 137,269 39,892 744,963 934,537 7,500 25,198 39,892 927,037 - 25,198 39,892 927,037 32,446 Profit after tax (Earnings after tax) 25,198 39,892 894,591 1,100,283 1,044,273 1,458,871 1,916,973 2,478,357 zia@ziaahmed.org 1 Financial Model Projected Balance Sheet 2005 Current Assets Investment Receivables Loans+Advances Bank Deposits Cash and Bank Balance Other current assets 45,404 85,149.00 198,988 361,529 495,800 549,000 598,979 612,000 20,720 24,495.00 151,048 279,978 312,000 281,574 262,696 396,506 350,000 471,120 400,000 491,281 450,000 550,000 2006 2007 2008 2009 2010 2011 2012 Total Current Assets 66,124 109,644 630,014 955,103 1,155,002 1,370,120 1,490,260 1,612,000 Assets Fixed Assets Land Building Furniture Fixture & Equipment Computer 1 Computer 2 Other Fixed Assets Total Fixed Assets 8,132 8,132 6,329.00 6,329.00 1,500,000 15,000 1,515,000 1,500,000 1,650,000 500,000 7,500 50,000 3,707,500 1,500,000 1,540,000 450,000 33,333 3,523,333 1,500,000 1,430,000 400,000 16,667 3,346,667 1,500,000 1,320,000 350,000 3,170,000 1,500,000 1,210,000 300,000 3,010,000 Other Assets Investment in subsidiaries Other Investments Advavces to suppliers of capital good +Contractors Investment in Projects Other intercarporate deposits etc. 0 Total Assets 74,256 0 115,973.00 849,308 966,476 3,111,490 1,328,906 2,198,906 6,861,509 300,000 270,000 117,168 300,000 759,218 600,000 478,000 150,000 2,806,360 4,793,578 9,471,913 1,002,061 1,200,000 979,839 600,000 5,088,087 8,869,987 13,586,774 1,800,000 1,900,000 1,858,630 956,000 8,381,733 14,896,363 19,556,623 3,200,554 3,538,000 1,942,622 1,930,173 12,780,587 23,391,936 28,013,936 Current Liabilities Sundry Creditors Short term bank barrowing unsecured loans long term loan maturing in 1 year advance received unpaid dividends provision for tax other provisions Other current liabilities Total Current Liabilities 7145 8220 85,073 147,695 235,537 367,747 436,584 512,855 7,145 8,220.00 85,073 147,695 235,537 367,747 436,584 512,855 Projected Balance Sheet Non Current Liabilities Debentures Long Term Loans Long Term Loans Employees Benefits Other Long Term Liability Total Long Term Liabilities 1,955 2,705 1,243,685 2,736,397 2,219,813 1,704,445 1,190,466 678,160 1,955 2705 20,591 41,945 64,251 87,774 112,685 139,270 1,223,094 2,694,452 2,155,561 1,616,671 1,077,781 538,890 Capital Liabilities Equity Share capital Minority Interest Reserve+Surplus General Reserve Capital Reserve Other Reserve Surplus P & L Total Total Liabilities Total Assets 229 1,927 65,156.00 74,256 74,256 229 4,819 105,048.00 115,973 115,973 894,591 1,782,732 3,111,490 3,111,490 1,100,283 3,977,417 6,861,509 6,861,509 1,044,273 7,016,564 9,471,914 9,471,913 1,458,871 11,514,582 13,586,774 13,586,774 1,916,973 17,929,573 19,556,622 19,556,623 2,478,357 26,822,920 28,013,935 28,013,936 894,591 1,994,873 3,039,147 4,498,018 6,414,991 63,000.00 100,000.00 888,141 1,982,544 3,977,417 7,016,564 11,514,582 17,929,573 0 0 (0) (0) 0 0 Working Capital Increase in working capital 58,979.00 101,424.00 42,445 544,941 443,517 150,000 293,517 807,408 262,467 100,000 162,467 919,465 112,057 100,000 12,057 1,002,373 82,908 100,000 (17,092) 1,053,676 51,303 100,000 (48,697) 1,099,145 45,469 100,000 (54,531) 293,517 434149.98 162,467 66185.02 12,057 246841 (17,092) 607772 (48,697) 1163380 (54,531) 1769827 Free Cash Flow Calculations Year zero ends DEC 2006 0 1 2 3 Ebit Taxes Depreciation and Amortisation Capex Net Change in Working Capital Free Cash Flow Operating Current Debt Repayment Scheme Net Cash Key Variables Number of Student Required Rate of Return Cash Multiple at Exit 5 Year Exit Value (30 June 2007) Present Value of 5 years Cashflow Value of Company at Exit Enterprise Value Net Debt Value of Equity 1,605,341 7,492,469 9,097,810 538,890 8,558,919 15% 7 927,037 32,446 7,500 (1,622,500) (443,517) (1,163,926) 0 (1,163,926) 1,140,189 39,907 27,500 (2,200,000) (262,467) (1,334,684) 0 (1,334,684) 1,259,982 44,099 204,167 (204,167) (112,057) 1,103,826 (538,890) 564,936 1,645,159 57,581 196,667 (196,667) (82,908) 1,504,670 (538,890) 965,780 Gross Total Capital Expenses Contingency Total Capital Expenses Rate of Interest Repayment Years Repayment Instalment Future Value of Debt 4,157,733 207,887 4,365,620 8.5% 6 6 0 Ration of Debt Debt Equity Capitalised Interest Total Loan Amount IPMT PPMT Debt Service Total Loan Service upto 4th Year FCCF upto 4 years FCCF/Debt Sevice 60% 2619372 1746248 222,647 2,842,019 ($41,534) ($488,634) (530,168) (2,120,673) 7,035,762 3.3177 70% 3055934 1309686 259,754 3,315,688 ($48,456) ($570,073) (618,530) (2,474,119) 7,035,762 2.8437 75% 3274215 1091405 278,308 3,552,523 ($51,917) ($610,793) (662,710) (2,650,842) 7,035,762 2.6542 80% 3492496 873124 296,862 3,789,358 ($55,379) ($651,513) (706,891) (2,827,564) 7,035,762 2.4883 4 5 2,075,417 72,640 196,667 (196,667) (51,303) 1,951,474 (538,890) 1,412,584 2,612,704 91,445 180,000 (180,000) (45,469) 2,475,791 (538,890) 1,936,900 Control Sheet (Inputs) Financial Assumptions Rf Rm Rd Beta Corporate Tax Rate 6.25% Kuwait Risk free rate 6% 8.25% Corporate interest Rate 2 3.50% Debt Equity Depreciation - Straight Line Method Item Computer & Software FFE Building Land Life in Years 60% 40% 3 10 15 Nil Revenue Assumption and Cost of Revenue Short Courses Frequency Growth per annum Fees Increase Cost Increase Salary Increase Bonus based on revenue 20% Inflation No. of students per 0% batch/growth 0% Utilities growth rate 0% 0% 0% PAAET 0% CSC 20% Diploma Special Courses Corporate Abroad 15 1750 10 120 28 15 20 First Year Students Item Short Courses PAAET CSC Diploma Special Courses Corporate Abroad Total Fees/participant 350 2,500 1,850 1,550 3,000 2,500 600 Students/Batch 12 200 10 20 6 8 15 Frequency 60 1 15 4 5 20 4 Total Participants 720 200 150 80 30 160 60 1,400.00 Revenue 252,000 500,000 277,500 124,000 90,000 400,000 36,000 1,679,500 Faculty Requirement Based Enrolements Assumptions Average working hours/day Average working hours/week Average work load/day Average work load/week Work/annum/faculty Average work load/annum Cost of Faculty/annum Benefits 1% of revenue Other Cost 1% Increament 8 44 6 33 44 Weeks 1452 4200 1% 1% Internal Travelling Short Courses PAAET CSC Diploma Special Courses Corporate Abroad No. of persons Average travel days External Travelling 0% Short Courses 0% PAAET 0 CSC 0 Diploma 0% Special Courses 0.5 Corporate 1 Abroad 2 Average Travel Days 5 Cost of External Faculty 20% Short Courses 0% PAAET 0% CSC 0% Diploma 0.5 Special Courses 0.4 Corporate 1 Abroad 5 Per student cost 20% Photocopying 0% Bags & Binder 0% Certification 0% Note Pad 0.2 Pens 0.3 Others 0.3 KD Cost as % of Revenue 2.5 Marketing & Promotion 0.5 Royalty 0 Admin 0.2 Expert 0.1 Resouces 0 Misc 1.5% 2% 1% 1.25% 1.75% 0.25% No. of Months 12 Utilities growth rate Utilities Water Electricity Fuel and Conveyance Allowance Other Total Utilities Cost Rent, Rates and Taxes Repairs and Maintainance Insurance Misc Expenses Contingency Total Administrative Cost Professional Fees Printing and Stationary Telephone & Mobile Internet/Lease line Books, Periodicals etc Library Miscellaneous Expenses Total Administrative Cost Marketing and Promotion Commission/Brokerage Other Selling Expenses Total Sales and Marketing Expenses 2007 20% 2,400 3,600 1,200 3,600 10,800 60,000 6,000 6,000 12,000 84,000 2008 2009 2010 2011 2012 2,880 4,320 1,440 4,320 12,960 72,000 7,200 7,200 14,400 100,800 3,456 5,184 1,728 5,184 15,552 86,400 8,640 8,640 17,280 120,960 4,147 6,221 2,074 6,221 18,662 103,680 10,368 10,368 20,736 145,152 4,977 7,465 2,488 7,465 22,395 124,416 12,442 12,442 24,883 174,182 5,972 8,958 2,986 8,958 26,874 149,299 14,930 14,930 29,860 209,019 15,000 7,200 14,400 3,600 3,600 6,000 8,400 58,200 12,000 14,400 6,000 32,400 18,000 8,640 17,280 4,320 4,320 7,200 10,080 69,840 14,400 17,280 7,200 38,880 21,600 10,368 20,736 5,184 5,184 8,640 12,096 83,808 17,280 20,736 8,640 46,656 25,920 12,442 24,883 6,221 6,221 10,368 14,515 100,570 20,736 24,883 10,368 55,987 31,104 14,930 29,860 7,465 7,465 12,442 17,418 120,684 24,883 29,860 12,442 67,185 37,325 17,916 35,832 8,958 8,958 14,930 20,902 144,820 29,860 35,832 14,930 80,622 Royalty and Know-How Payable Total 36,000 189,000 43,200 226,800 51,840 272,160 62,208 326,592 74,650 391,910 89,580 470,292 Revenue Model Inflation No. of students per batch/growth Frequency Growth per annum 0% 0% 20% Course Prices 2007 Short Courses PAAET CSC Diploma Special Courses Corporate Abroad 350 2,500 1,850 1,550 3,000 2,500 600 2008 350 2,500 1,850 1,550 3,000 2,500 600 2009 350 2,500 1,850 1,550 3,000 2,500 600 2010 350 2,500 1,850 1,550 3,000 2,500 600 2011 350 2,500 1,850 1,550 3,000 2,500 600 2012 350 2,500 1,850 1,550 3,000 2,500 600 2007 No. Stud. Per batch Growth Rate Short Courses PAAET CSC Diploma Special Courses Corporate Abroad 0.0% 12 200 10 20 6 8 15 2007 Frequency growth% Short Courses PAAET CSC Diploma Special Courses Corporate Abroad Total Participants Short Courses PAAET CSC Diploma Special Courses Corporate Abroad Total Student Revenues Short Courses PAAET CSC Diploma Special Courses Corporate Abroad Total Revenues 60 1 15 4 5 20 4 2007 720 200 150 80 30 160 60 1,400.00 2007 252,000 500,000 277,500 124,000 90,000 400,000 36,000 1,679,500 2008 0.0% 12 200 10 20 6 8 15 2008 20% 72 1 18 5 6 24 5 2008 864 240 180 100 36 192 75 1,687.00 2008 302,400 600,000 333,000 155,000 108,000 480,000 45,000 2,023,400 2009 0.0% 12 200 10 20 6 8 15 2009 20% 87 1 22 6 8 29 6 2009 1,044 288 220 120 48 232 90 2,042.00 2009 365,400 720,000 407,000 186,000 144,000 580,000 54,000 2,456,400 2010 0.0% 12 200 10 20 6 8 15 2010 20% 105 2 27 8 10 35 8 2010 1,260 346 270 160 60 280 120 2,496.00 2010 441,000 865,000 499,500 248,000 180,000 700,000 72,000 3,005,500 2011 0.0% 12 200 10 20 6 8 15 2011 20% 126 2 33 10 12 42 10 2011 1,512 415 330 200 72 336 150 3,015.00 2011 529,200 1,037,500 610,500 310,000 216,000 840,000 90,000 3,633,200 2012 0.0% 12 200 10 20 6 8 15 2012 20% 152 2 40 12 15 51 12 2012 1,824 498 400 240 90 408 180 3,640.00 2012 638,400 1,245,000 740,000 372,000 270,000 1,020,000 108,000 4,393,400 Faculty Requirement Based Enrolements Assumptions Average working hours/day Average working hours/week Average work load/day Average work load/week Work/annum/faculty Average work load/annum Cost of Faculty/annum Benefits 1% of revenue Other Cost 1% Increment 8 44 6 33 44 Weeks 1452 4200 1% 1% Internal Travelling Short Courses PAAET CSC Diploma Special Courses Corporate Abroad No. of persons Average travel days External Travelling 0 Short Courses 0 PAAET 0 CSC 0 Diploma 0 Special Courses 50% Corporate 100% Abroad 2 Average Travel Days 5 Cost of External Faculty 20% Short Courses 0% PAAET 0% CSC 0% Diploma 50% Special Courses 40% Corporate 100% Abroad 5 Per student cost 20% Photocopying 0% Bags & Binder 0% Certification 0% Note Pad 20% Pens 30% Others 0.3 KD Cost as % of Revenue 2.5 Marketing & Promotion 0.5 Royalty 0 Admin 0.2 Expert 0.1 Resouces 0 Misc 2% 2% 1% 1% 2% 0% Total Faculty Cost Item Short Courses PAAET CSC Diploma Special Courses Corporate Abroad Total Hours of working Faculty Requirment Add on Stand BY External Faculty and Experts Total No. of Faculty Basic Cost of Faculty Benefit Medical+Graduity+visa+ticket Total Faculty Cost Employee overheads Total H R Employee Benefits Cumulative 12 0 1 1 Total hours/batch 15 1750 10 120 28 15 20 2007 900 1,750 150 480 140 300 80 3,800 3 1 1 5 19,392 16,795 16,795 52,982 194,110 247,092 20,591 20,591 2008 1,080 2,100 180 600 168 360 100 4,588 3 1 1 5 21,671 20,234 20,234 62,139 194,110 256,249 21,354 41,945 2009 1,305 2,520 220 720 224 435 120 5,544 4 1 1 6 24,436 24,564 24,564 73,564 194,110 267,674 22,306 64,251 2010 1,575 3,024 270 960 280 525 160 6,794 5 1 1 7 28,052 30,055 30,055 88,162 194,110 282,272 23,523 87,774 2011 1,890 3,629 330 1,200 336 630 200 8,215 6 1 1 8 32,162 36,332 36,332 104,826 194110 298936 24911 112685 2012 2,280 4,355 400 1,440 420 765 240 9,900 7 1 1 9 37,035 43,934 43,934 124,903 194110 319013 26584 139270 Cost of travel Internal Item Internal Faculty and Manager Travelling Loadging and Boarding Cost Of Travelling Travelling Cost Loadging and Boarding Cost Total Frequency Days Cost per travel KD 300 125 14 70 2007 8,400 43,750 52150 17 85 2008 10,200 53,125 63325 21 103 2009 12,300 64,375 76675 26 128 2010 15,300 80,000 95300 31 155 2011 18,600 96,875 115475 38 188 2012 22,500 117,500 140000 2007 2008 2009 2010 2011 2012 External Faculty Cost Of Travelling Travelling Loadging and Boarding Remuration Travelling Loadging and Boarding Total 400 200 Units Frequency 0.2 2007 27 5 77,880 10600 1060 89,540 2008 32 6 93,996 12800 1280 108,076 2009 39 8 114,816 15600 1560 131,976 2010 48 10 141,240 19200 1920 162,360 2011 58 12 170,568 23200 2320 196,088 2012 70 14 207,336 28120 2812 238,268 Faculty Requirement Based Enrolements All Courses Photocopying Bags & Binder Certification Note Pad Pens Others 2007 3,500.00 700.00 280.00 140.00 2008 4,217.50 843.50 337.40 168.70 2009 5,105.00 1,021.00 408.40 204.20 2010 6,240.00 1,248.00 499.20 249.60 2011 7,537.50 1,507.50 603.00 301.50 2012 9,100.00 1,820.00 728.00 364.00 - Total 4,620.00 5,567.10 6,738.60 8,236.80 9,949.50 12,012.00 All Courses Marketing and Promotion Admin Resouces Royalty Expert Misc Total 2007 25,192.50 33,590.00 16,795.00 20,993.75 29,391.25 4,198.75 130,161.25 2008 30,351.00 40,468.00 20,234.00 25,292.50 35,409.50 5,058.50 156,813.50 2009 36,846.00 49,128.00 24,564.00 30,705.00 42,987.00 6,141.00 190,371.00 2010 45,082.50 60,110.00 30,055.00 37,568.75 52,596.25 7,513.75 232,926.25 2011 54,498.00 72,664.00 36,332.00 45,415.00 63,581.00 9,083.00 281,573.00 2012 65,901.00 87,868.00 43,934.00 54,917.50 76,884.50 10,983.50 340,488.50 HR Cost Assumptions Vacation Leave Legal Fees 1 month 0.5 month 40 KWD/head Employees will be added if and only if very essentiall other wise allof the extra work will be outsourse Average 10% increase on salaries and 10% increase on staff cost is assumed so total 20% rise is expected Rise/annum 20% Employees Marketing and Promotion Event Management PAAET Projects Training Department Knowledge Center Managers Accounts and Admin Support Staff Total No. of Employee's 6 2 2 4 3 4 3 10 34 Salary/head 250 200 500 600 250 850 300 250 Total Salary/month 1500 400 1000 2400 750 3400 900 2500 12850 Annual Salary 18000 4800 12000 28800 9000 40800 10800 30000 154200 Benefits 1500 400 1000 2400 750 3400 900 2500 12850 Insurance 750 200 500 1200 375 1700 450 1250 6425 Legal Fees 240 80 80 160 120 160 120 400 1360 Vacation 1500 400 1000 2400 750 3400 900 2500 12850 Leave 750 200 500 1200 375 1700 450 1250 6425 Total 22740 6080 15080 36160 11370 51160 13620 37900 194110 CAPEX SHEET Item Land Building Furniture Fixture & Equipment Computer 1 Computer 2 Other Fixed Assets 22,500 50,000 2005 2006 2007 1,500,000 1,650,000 500,000 2008 2009 2010 2011 2012 Preoperative expenses Total Fixed Assets - 100,000 1,622,500 2,200,000 3,822,500 1,529,000 2,293,500 764,500 - Capital Structure Total Cost of Project Margin Money Margin Money Loan 80% Total Capital Expenses Gross Total Capital Expenses Debt Equity Corporate interest Rate 60% 40% 8.25% 1,174,640 783,093 1,622,500 186,241 148,993 1,957,733 2,200,000 4,157,733 1,320,000 880,000 199,812 2,200,000 - - - - Capitalised Interest Total Loan Loan Repayment 5 equal instalments 48,453.90 1,223,094 2,494,640 2,694,452 538,890 2005 Total Loan Instalments Loan Outstanding Intrest Payment Total Repayment Depreciation - Straight Line Method Item Computer & Software FFE Building Land Life in Years 3 10 15 Nil Type 2006 2007 2008 2009 538,890 2010 538,890 1,616,671 133,375 672,266 2011 538,890 1,077,781 88,917 627,807 2012 538,890 538,890 44,458 583,349 1,223,094 2,694,452 2,155,561 177,834 716,724 Straight Line Method Straight Line Method Straight Line Method Self Use 7,500 50,000 110,000 - 16,667 Depreciation Schedule Item A. Straight Line Method Land Opening Balance Less Depreciation Closing Balance Building Opening Balance Less Depreciation Closing Balance FFE Opening Balance Depreciation Closing Balance Computer 1 Opening Balance Depreciation Closing Balance Computer 2 Opening Balance Depreciation Closing Balance Other Fixed Assets Opening Balance Depreciation Closing Balance 50,000 50,000 50,000 16,667 33,333 33,333 16,667 16,667 16,667 16,667 22,500 7,500 15,000 15,000 7,500 7,500 7,500 7,500 500,000 500,000 500,000 50,000 450,000 450,000 50,000 400,000 400,000 50,000 350,000 350,000 50,000 300,000 1,650,000 1,650,000 1,650,000 110,000 1,540,000 1,540,000 110,000 1,430,000 1,430,000 110,000 1,320,000 1,320,000 110,000 1,210,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 2005 2006 2007 2008 2009 2010 2011 2012 Summary Opening Balance 1,522,500 3,715,000 3,707,500 3,523,333 3,346,667 3,170,000 CAPEX SHEET Depreciation Closing Balance 7,500 1,515,000 7,500 3,707,500 184,167 3,523,333 176,667 3,346,667 176,667 3,170,000 160,000 3,010,000 Item Interest Payment Loan Repayment Loan Out Standing Loan Decrease 2005 - 2006 - 2007 1,223,094 - 2008 2,694,452 - 2009 177,834 716,724 2,155,561 538,890 2010 133,375 672,266 1,616,671 538,890 2011 88,917 627,807 1,077,781 538,890 2012 44,458 583,349 538,890 538,890 Item Fixed Assets Land Building Furniture Fixture & Equipment Computer 1 Computer 2 Other Fixed Assets Total Fixed Assets 2005 - 2006 - 2007 1,500,000 15,000 1,515,000 2008 1,500,000 1,650,000 500,000 7,500 50,000 3,707,500 2009 1,500,000 1,540,000 450,000 33,333 3,523,333 2010 1,500,000 1,430,000 400,000 16,667 3,346,667 2011 1,500,000 1,320,000 350,000 3,170,000 2012 1,500,000 1,210,000 300,000 3,010,000