Willow Park Golf Course
Financial Plan
The following is the financial plan for the Willow Park Golf Course. We anticipate a first year of fluctuating sales and expenses as we become established physically, and in the minds of our target market. The first year we will have one time expenses in restoring the course and establishing our maintenance routines. As our existence and reputation become known we steady growth, and a more even membership sales as golfers from cold snowy climes travel to the Crest Canyon area, and Willow Park particularly to play golf during the winter months.
7.1 Break-even Analysis
Using averaged monthly total expenses and an estimated variable cost, the monthly break-even point in sales revenue is calculated and shown below.
| Break-even Analysis | |
| Monthly Revenue Break-even | $113,085 |
| Assumptions: | |
| Average Percent Variable Cost | 16% |
| Estimated Monthly Fixed Cost | $94,730 |
7.2 Projected Profit and Loss
The following table and charts show the projected profit and loss for three years. Monthly figures for the first year are shown in the appendix.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $1,443,500 | $1,620,000 | $1,930,000 |
| Direct Cost of Sales | $234,300 | $271,000 | $323,000 |
| Other Production Expenses | $0 | $0 | $0 |
| Total Cost of Sales | $234,300 | $271,000 | $323,000 |
| Gross Margin | $1,209,200 | $1,349,000 | $1,607,000 |
| Gross Margin % | 83.77% | 83.27% | 83.26% |
| Expenses | |||
| Payroll | $588,000 | $635,000 | $680,000 |
| Sales and Marketing and Other Expenses | $60,000 | $80,000 | $100,000 |
| Depreciation | $28,560 | $28,560 | $28,560 |
| Leased Equipment | $72,000 | $80,000 | $80,000 |
| Utilities | $26,000 | $26,000 | $26,000 |
| Insurance | $24,000 | $24,000 | $24,000 |
| Lease | $250,000 | $250,000 | $250,000 |
| Payroll Taxes | $88,200 | $95,250 | $102,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $1,136,760 | $1,218,810 | $1,290,560 |
| Profit Before Interest and Taxes | $72,440 | $130,190 | $316,440 |
| EBITDA | $101,000 | $158,750 | $345,000 |
| Interest Expense | $28,066 | $24,643 | $21,072 |
| Taxes Incurred | $13,312 | $31,664 | $88,610 |
| Net Profit | $31,062 | $73,883 | $206,758 |
| Net Profit/Sales | 2.15% | 4.56% | 10.71% |
7.3 Projected Cash Flow
The following table and chart show the projected cash flow for three years. Monthly figures for the first year are shown in the appendix.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $1,443,500 | $1,620,000 | $1,930,000 |
| Subtotal Cash from Operations | $1,443,500 | $1,620,000 | $1,930,000 |
| 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 | $1,443,500 | $1,620,000 | $1,930,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $588,000 | $635,000 | $680,000 |
| Bill Payments | $732,096 | $861,100 | $1,007,098 |
| Subtotal Spent on Operations | $1,320,096 | $1,496,100 | $1,687,098 |
| 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 | $35,712 | $35,712 | $35,712 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $1,355,808 | $1,531,812 | $1,722,810 |
| Net Cash Flow | $87,692 | $88,188 | $207,190 |
| Cash Balance | $122,292 | $210,480 | $417,670 |
7.4 Projected Balance Sheet
The following table presents the projected balance sheet for three years. Monthly figures for the first year are shown in the appendix.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $122,292 | $210,480 | $417,670 |
| Inventory | $15,125 | $17,494 | $20,851 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $137,417 | $227,975 | $438,521 |
| Long-term Assets | |||
| Long-term Assets | $210,000 | $210,000 | $210,000 |
| Accumulated Depreciation | $28,560 | $57,120 | $85,680 |
| Total Long-term Assets | $181,440 | $152,880 | $124,320 |
| Total Assets | $318,857 | $380,855 | $562,841 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $48,907 | $72,734 | $83,674 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $48,907 | $72,734 | $83,674 |
| Long-term Liabilities | $264,288 | $228,576 | $192,864 |
| Total Liabilities | $313,195 | $301,310 | $276,538 |
| Paid-in Capital | $600,000 | $600,000 | $600,000 |
| Retained Earnings | ($625,400) | ($594,338) | ($520,455) |
| Earnings | $31,062 | $73,883 | $206,758 |
| Total Capital | $5,662 | $79,545 | $286,302 |
| Total Liabilities and Capital | $318,857 | $380,855 | $562,841 |
| Net Worth | $5,662 | $79,545 | $286,302 |
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 7997, Membership Sports and Recreation, are shown for comparison.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 12.23% | 19.14% | 15.20% |
| Percent of Total Assets | ||||
| Inventory | 4.74% | 4.59% | 3.70% | 4.00% |
| Other Current Assets | 0.00% | 0.00% | 0.00% | 31.80% |
| Total Current Assets | 43.10% | 59.86% | 77.91% | 40.90% |
| Long-term Assets | 56.90% | 40.14% | 22.09% | 59.10% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 15.34% | 19.10% | 14.87% | 31.60% |
| Long-term Liabilities | 82.89% | 60.02% | 34.27% | 28.00% |
| Total Liabilities | 98.22% | 79.11% | 49.13% | 59.60% |
| Net Worth | 1.78% | 20.89% | 50.87% | 40.40% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 83.77% | 83.27% | 83.26% | 0.00% |
| Selling, General & Administrative Expenses | 81.62% | 78.71% | 72.55% | 72.30% |
| Advertising Expenses | 4.16% | 4.94% | 5.18% | 2.70% |
| Profit Before Interest and Taxes | 5.02% | 8.04% | 16.40% | 2.60% |
| Main Ratios | ||||
| Current | 2.81 | 3.13 | 5.24 | 1.23 |
| Quick | 2.50 | 2.89 | 4.99 | 0.83 |
| Total Debt to Total Assets | 98.22% | 79.11% | 49.13% | 59.60% |
| Pre-tax Return on Net Worth | 783.71% | 132.69% | 103.17% | 2.80% |
| Pre-tax Return on Assets | 13.92% | 27.71% | 52.48% | 6.90% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 2.15% | 4.56% | 10.71% | n.a |
| Return on Equity | 548.60% | 92.88% | 72.22% | n.a |
| Activity Ratios | ||||
| Inventory Turnover | 10.64 | 16.62 | 16.85 | n.a |
| Accounts Payable Turnover | 15.97 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 25 | 28 | n.a |
| Total Asset Turnover | 4.53 | 4.25 | 3.43 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 55.31 | 3.79 | 0.97 | n.a |
| Current Liab. to Liab. | 0.16 | 0.24 | 0.30 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $88,510 | $155,241 | $354,846 | n.a |
| Interest Coverage | 2.58 | 5.28 | 15.02 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.22 | 0.24 | 0.29 | n.a |
| Current Debt/Total Assets | 15% | 19% | 15% | n.a |
| Acid Test | 2.50 | 2.89 | 4.99 | n.a |
| Sales/Net Worth | 254.94 | 20.37 | 6.74 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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