Silver Bear Lodge

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Resort Hotel Ski Lodge Business Plan

Financial Plan

The following is the financial plan for the Silver Bear Lodge.

7.1 Break-even Analysis

The monthly break-even point is approximately $52,900.

Break-even Analysis
Monthly Revenue Break-even $52,905
Assumptions:
Average Percent Variable Cost 11%
Estimated Monthly Fixed Cost $46,965

7.2 Projected Profit and Loss

The following is the projected profit and loss for three years.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $741,000 $915,000 $1,022,000
Direct Cost of Sales $83,200 $101,000 $128,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $83,200 $101,000 $128,000
Gross Margin $657,800 $814,000 $894,000
Gross Margin % 88.77% 88.96% 87.48%
Expenses
Payroll $382,000 $414,000 $438,000
Sales and Marketing and Other Expenses $60,000 $80,000 $100,000
Depreciation $14,280 $14,280 $14,280
Leased Equipment $0 $0 $0
Utilities $26,000 $26,000 $26,000
Insurance $24,000 $24,000 $24,000
Lease $0 $0 $0
Payroll Taxes $57,300 $62,100 $65,700
Other $0 $0 $0
Total Operating Expenses $563,580 $620,380 $667,980
Profit Before Interest and Taxes $94,220 $193,620 $226,020
EBITDA $108,500 $207,900 $240,300
Interest Expense $33,375 $30,500 $27,500
Taxes Incurred $18,254 $48,936 $59,556
Net Profit $42,592 $114,184 $138,964
Net Profit/Sales 5.75% 12.48% 13.60%

7.3 Projected Balance Sheet

The following is the projected balance sheet for three years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $31,437 $118,555 $165,584
Other Current Assets $14,000 $32,000 $53,000
Total Current Assets $45,437 $150,555 $218,584
Long-term Assets
Long-term Assets $350,000 $370,000 $430,000
Accumulated Depreciation $14,280 $28,560 $42,840
Total Long-term Assets $335,720 $341,440 $387,160
Total Assets $381,157 $491,995 $605,744
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $3,965 $30,619 $35,405
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $3,965 $30,619 $35,405
Long-term Liabilities $320,000 $290,000 $260,000
Total Liabilities $323,965 $320,619 $295,405
Paid-in Capital $200,000 $200,000 $200,000
Retained Earnings ($185,400) ($142,809) ($28,625)
Earnings $42,592 $114,184 $138,964
Total Capital $57,192 $171,376 $310,340
Total Liabilities and Capital $381,157 $491,995 $605,744
Net Worth $57,192 $171,376 $310,340

7.4 Projected Cash Flow

The following is the projected cash flow for three years.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $741,000 $915,000 $1,022,000
Subtotal Cash from Operations $741,000 $915,000 $1,022,000
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 $741,000 $915,000 $1,022,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $382,000 $414,000 $438,000
Bill Payments $298,163 $345,882 $425,971
Subtotal Spent on Operations $680,163 $759,882 $863,971
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 $30,000 $30,000 $30,000
Purchase Other Current Assets $14,000 $18,000 $21,000
Purchase Long-term Assets $0 $20,000 $60,000
Dividends $0 $0 $0
Subtotal Cash Spent $724,163 $827,882 $974,971
Net Cash Flow $16,837 $87,118 $47,029
Cash Balance $31,437 $118,555 $165,584

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 7011, Hotels and Motels, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 23.48% 11.69% 5.90%
Percent of Total Assets
Other Current Assets 3.67% 6.50% 8.75% 26.00%
Total Current Assets 11.92% 30.60% 36.09% 32.00%
Long-term Assets 88.08% 69.40% 63.91% 68.00%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 1.04% 6.22% 5.84% 19.40%
Long-term Liabilities 83.95% 58.94% 42.92% 34.60%
Total Liabilities 85.00% 65.17% 48.77% 54.00%
Net Worth 15.00% 34.83% 51.23% 46.00%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 88.77% 88.96% 87.48% 0.00%
Selling, General & Administrative Expenses 83.02% 76.48% 73.88% 75.10%
Advertising Expenses 8.10% 8.74% 9.78% 1.90%
Profit Before Interest and Taxes 12.72% 21.16% 22.12% 2.50%
Main Ratios
Current 11.46 4.92 6.17 1.45
Quick 11.46 4.92 6.17 1.05
Total Debt to Total Assets 85.00% 65.17% 48.77% 54.00%
Pre-tax Return on Net Worth 106.39% 95.18% 63.97% 1.70%
Pre-tax Return on Assets 15.96% 33.15% 32.77% 3.70%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 5.75% 12.48% 13.60% n.a
Return on Equity 74.47% 66.63% 44.78% n.a
Activity Ratios
Accounts Payable Turnover 76.19 12.17 12.17 n.a
Payment Days 27 17 28 n.a
Total Asset Turnover 1.94 1.86 1.69 n.a
Debt Ratios
Debt to Net Worth 5.66 1.87 0.95 n.a
Current Liab. to Liab. 0.01 0.10 0.12 n.a
Liquidity Ratios
Net Working Capital $41,472 $119,936 $183,180 n.a
Interest Coverage 2.82 6.35 8.22 n.a
Additional Ratios
Assets to Sales 0.51 0.54 0.59 n.a
Current Debt/Total Assets 1% 6% 6% n.a
Acid Test 11.46 4.92 6.17 n.a
Sales/Net Worth 12.96 5.34 3.29 n.a
Dividend Payout 0.00 0.00 0.00 n.a