Financial Feasibility Report

The online tutorship business is a full time or part-time job which face some difficulties in start but once you capture the clients, you have a good source of earning. San Francisco, Bay area is populated area with natural beauty and well business diversity.

Whenever there is a new startup business, there should be a financial feasibility analysis to check about future risk and profit. It helps to prepare a budget to deal with the cost and expenses incurring in future. A feasibility report could be analyzed with following information:

Budgeted expense required for the project.

Resources of finance during the year

Profitability ratio of business

The initial investment by promoters

A feasibility report is an effective tool to analyze the results of business about its technical, social and financial issues which may create problem in future. Financial feasibility report often helps the management to forecast the future sale and profit margin to take important decisions.

Purpose of financial feasibility report

Financial feasibility is prepared to meet the different purposes of investors to learn about the future position of the business. With the help of feasibility report, investors can check the potential return on investment in risky investment.

Another purpose of the feasibility report is to learn about the finance of business to determine how much further funds you need to meet the future expense. For example loan requirement for a specific project etc.  The financial report is maintained to check about the operating expense, manufacturing expense and revenue generation from the project.

Startup Cost of Online Tutorship Business:

Sales forecast:

Discounted cash flow, Net Present Value & IRE *Estimated cost is supposed to increase according to inflation rate 7.19%.

Return on Investment:

·        Discounted cash flow is the valuation method to estimate the value of investment in future time.

·        Net present value is the difference between present cash inflow and cash outflow.

·        Internal rate of return is a rate at which NP is 0.

·        The payback period is a period after which the investment will start to return from initial.

Discounted cash flow, Net Present Value & IRR

·        Discounted cash flow is the valuation method to estimate the value of investment in future time.

·        Net present value is the difference between present cash inflow and cash outflow.

·        Internal rate of return is a rate at which NPV is 0.

·        The payback period is a period after which the investment will start to return from initial.

Discounted Cash Flow

For loan amount with 6.5% and 7.5% interest rate

For overall investment with 10% and 20% return

Internal Rate of Return

PAYBACK PERIOD:

Above calculations show the estimated cost and profit of the new start business of online tutorship in San Francisco. The total cost incurred in the year is considered as an investment for the business. Financial feasibility report shows the startup cost of business and risk management to avoid the loss.