Building confidence in your financial position is based upon knowing how to operate through times of economic uncertainty. Although some degree of uncertainty is unavoidable, financial modeling is critical to understand the range of likely outcomes and their implications.
Developing a robust financial model begins with analyzing the underlying drivers of performance. After identifying the key drivers and their impact on your overall financials, Analytical Compass Projection provides a platform to project future outcomes based on changing economic assumptions. This tool allows you to model the detailed revenue and expense items critical to your financial security, financing sources and uses, changes in enrollment, and cutbacks from core revenue sources. Your output is linked to PowerPoint, providing a library of charts and graphs to enhance the effectiveness of your communications regarding:
Future Revenues
- Develop five year projections for up to 10 revenues
- Apply dynamic growth rate assumptions specific to each source or develop detailed amounts based on your specific situation
- Apply haircut factors to local, state, and federal revenues in anticipation of top down revenue reductions (e.g. only pay 95 cents per dollar owed)
Future Expenses
- Develop five year projections for up to 10 expenses
- Individually address expense items with dynamic growth rates over projection period
- Develop detailed salary expense based on specific contracts and employee breakdown
Financing
- Complete financial projection by incorporating future financing activities
- Model annual financing sources, including bond issues and fixed asset sales
- Incorporate future financing uses, including bond payments and capital investments
Liquidity
- Develop annual cash flow surplus/deficit based on revenue and expense assumptions (pre-financing)
- Incorporate annual financing activities for net cash flows
- Build monthly projected cash balances based on cash flow models and account balances
Enrollment
- Build projection of future enrollment levels
- Analyze future revenue and expense sources on a per pupil basis (“Per Pupil Finances”)
- Develop perspective around growth rates of Per Pupil Finances (e.g. salary cost per pupil)
Fund Allocation
- Project future fund balances based on annual revenues and expenses
- Change allocations of general funds each year as needed to maintain minimum thresholds
- Transfer money between funds and allocate financing cash flows on yearly basis
Detailed Economic Drivers*
- Build detailed tax levies around your property values, tax rates, and caps
- Develop State Aid revenues based on your state’s formulas, including enrollment multipliers, hold harmless thresholds, revenue offsets, and reduction factors
- Build total salary expense based on projecting existing contract tables and employee groups
*Detailed local and state revenue development is based on actual tax levy and state aid calculations for your state. Choose your state under “States” for more information.