Genesis Management Services Pty Ltd gmservices.com.au
genesis
SERVICES
EXPERIENCE
CASE STUDY - TRAVEL 'N' TOUR
A CASE STUDY IN FINANCIAL MANAGEMENT
Company history
Travel 'n' Tour is an hypothetical travel agency operating in Australia bearing no relationship to any particular agency.
The financial details have been created to illustrate some of the typical financial management issues facing travel agencies in Australia.
It is important to remember that, according to the Australian Bureau of Statistics, travel agencies in general do not appear to be making any money at all. In their 1986/1987 statistics they found that the 19 largest travel business lost $12.3 million in 1986/1987 before tax although the many smaller agencies must have been more profitable since the overall industry loss was only $1.6 million.
Certainly some of the financial problems throughout the 1980s in the Australian travel industry have been due to discounting, despite the fact that retail travel grew throughout this period.
Of great interest to top management is the pace of change and the onset of significant changes to the industry in terms of rationalisation, automation and consumer preferences.
All of these issues carry with them a requirement for careful financial analysis in the planning and decision-making activities of the business. This task requires knowledge and skill in financial management which, unfortunately, is obviously not up to standard.
Travel 'n' Tour commenced operations in 1980 and the owners, Mr & Mrs Powell, launched their business on the basis of some past experience, confidence in the growth of the retail travel industry and with $70,000 in capital.
They expected to incur small losses in the first six months while they were establishing but were comforted by the fact that these losses could be offset against future profits before income tax was paid.
Ten year history 1981-1990
1981
Mr Powell acted as the Manager and employed a full-time salesperson in the first week to service travel clientele. His wife acted as a part-time secretary/bookkeeper and performed the necessary administrative work.
A five-year lease was executed with an option to renew for a further five years. The Powell’s decided to make some alterations and improvements to the leasehold premises on the strength of the long-term nature of the lease. They assumed that the landlord would compensate them somehow at the end of the five years.
A short-term overdraft was arranged with the bank to ensure that the company had adequate working capital to start with.
1982
A part-time salesperson was employed to service commercial clients.
The economy entered a recessionary period and the Powell’s found they had to work very hard to develop business and to stay afloat. They had not budgeted for a downturn such as was experienced.
1983
The part-time salesperson agreed to work full- time.
With an upturn in the economy an advertising programme was launched together with selected direct mail. A marketing plan was prepared as a basis for these activities although it was not translated into a new budget.
The bank manager repeated his request for a three year budget and cash flow. The liability to the bank had been steadily increasing and to relieve this pressure a long-term loan was negotiated through the bank.
1984
A sales incentive scheme was initiated, rewarding sales staff for budget achievement. This was geared not only to sales volume, but also to commissions earned, new business won, and to staff productivity.
The motor vehicle was proving unsuitable for the task particularly for entertaining senior managers of commercial accounts.
1985
Another part-time salesperson was employed with the promise of a full-time position in the short to medium term.
The advertising budget was increased to expand the touring and cruise aspects of the business. A small sum was also spent on market research.
1986
Another full-time sales position was made possible by continued growth.
A full time accountant was employed to take over the work that Mrs Powell had been doing, together with assistance from an outside firm of accountants.
The lease on the premises was renewed for another five years and fortunately the landlord acknowledged the value of the leasehold improvements that had been made in the preceding five years, and offered to reimburse the Powell’s for all improvements made at the end of this new lease period. This promise was referred to in a letter from the landlord.
The company was able to make some short-term investments, the motive being to set aside a "nest egg" for possible future acquisition of another travel agency.
1987
The advertising budget was further expanded in an attempt to increase commission yields.
A policy decision was also made to reduce the amount of short and long-term debt as quickly as possible.
1988
Another new salesperson was employed on a part- time basis and also a part- time clerk was employed to assist the accountant.
1989
Again the part-time sales position was converted to full-time and a new full-time salesperson was also employed.
Additional funds were employed on direct selling efforts for some of the minor activities in an effort to reduce dependency on major airlines who seemed to be squeezing commissions.
There were significant increases in Council rates which were passed on by the landlord in accordance with the lease agreement. These were not budgeted and were due to extraordinary growth in property values throughout the late 1980s.
The Powell’s were advised by an old family friend to prepare themselves for a possible severe downturn in the overseas travel market due to an adverse movement in the Australian exchange rate and a possible severe slump in the property market. It was the latter slump that was of most concern because of its likely effect on interest rates and corporate liquidity. For these reasons the Powell’s decided that 1990 was a year to plan to be liquid and to develop business plans for the next five years.
1990
Another full-time salesperson was added to strengthen the company in the domestic travel sector, thus providing Tour 'n' Travel with six full-time selling personnel, together with Mr Powell as Manager, who was devoting 60% of his time to servicing clients and other matters of a marketing nature.
During the business plan preparation, it became obvious that several agencies would be available for sale and that furthermore there appeared to be several prospective buyers for Travel 'n' Tour. The Powell’s decided to carefully evaluate all of these options as well as review performance of the company in line with their original hopes, aspirations and objectives that were set ten years before.
There are a number of schedules setting out the financial history of the business. They include:-
Profit statements
Ten-year history of sales volume, commission income, expenses and profitability.
The sales volume (revenue) and commission income figures have been summarised, not only in total, but also for each sector of the company's business, viz: Domestic Airlines (non-packaged tours), Domestic Airlines (packaged tours), International Airlines (non-packaged tours), International Airlines (packaged tours), Total Airline Business (domestic & international), Ship Cruising , Domestic Coach, Domestic Rail, Car Rental, Accommodation, and Other Income
The expenses are shown in summary form rather than in great detail in accordance with a chart of accounts. Expenses have been grouped under functional headings for
Sales Staff
Manager - Selling
Manager - Administration
Office Staff (eg. clerical and accounting)
Selling Costs (eg. advertising, direct mail, market research)
Administration
Finance Costs (interest on overdraft & loans, bank charges, etc.)
Occupancy Costs (eg. rent, rates, depreciation on leasehold improvements) Revenue and commission analysis
Revenue percentage relationships as follows:
The percentage that revenue from each sector of the business relates to total revenue.
The percentage commission earned in each sector of the business compared with the revenue generated. Notice that average commission yields are shown for total airline business and for total commission earned.
A breakdown of total commission in accordance with the commission earned by each sector. The object here is to illustrate how each sector contributes to the commission earning task of the business.
Percentage relationship for each item of expense to total commission earned including some interesting figures in relation to sales productivity.
Balance Sheets
Figures illustrating the financial position of the company at the end of each year are included containing details of assets (things which the company owns) and liabilities (things which the company owes).
An analysis of the balance sheets examines some key statistics indicating the quality of financial management.
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TRAVEL 'N' TOUR |
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REVENUE HISTORY |
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SCHEDULE 1 |
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TOTAL REVENUE VOLUME |
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1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
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1. |
AIRLINE |
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All figures are expressed to the nearest $'000. |
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Domestic |
150 |
200 |
242 |
270 |
250 |
310 |
374 |
400 |
500 |
600 |
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Domestic Packaged & Group |
60 |
80 |
102 |
140 |
220 |
120 |
180 |
190 |
260 |
300 |
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International |
130 |
170 |
210 |
270 |
340 |
380 |
260 |
350 |
390 |
420 |
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International Packaged & Group |
65 |
110 |
138 |
146 |
100 |
130 |
120 |
166 |
208 |
216 |
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Sub-total Airline |
405 |
560 |
692 |
826 |
910 |
940 |
934 |
1106 |
1358 |
1536 |
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2. |
OTHER |
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Sea Cruising |
10 |
12 |
14 |
46 |
70 |
170 |
216 |
264 |
394 |
406 |
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Domestic Coach |
50 |
80 |
120 |
156 |
184 |
270 |
270 |
292 |
350 |
572 |
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Domestic Rail (intra & interstate) |
10 |
10 |
22 |
26 |
36 |
70 |
156 |
178 |
246 |
268 |
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Hire Car |
1 |
2 |
20 |
30 |
100 |
160 |
180 |
240 |
292 |
406 |
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Accommodation |
5 |
6 |
6 |
86 |
110 |
184 |
208 |
256 |
270 |
312 |
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Sundry |
19 |
38 |
46 |
30 |
30 |
6 |
36 |
64 |
90 |
100 |
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Sub-total Other |
95 |
148 |
228 |
374 |
530 |
860 |
1066 |
1294 |
1642 |
2064 |
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TOTAL REVENUE |
500 |
708 |
920 |
1200 |
1440 |
1800 |
2000 |
2400 |
3000 |
3600 |
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SCHEDULE |
2 |
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REVENUE ANALYSIS |
1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
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1. |
AIRLINE |
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Domestic |
30.0% |
28.2% |
26.3% |
22.5% |
17.4% |
17.2% |
18.7% |
16.7% |
16.7% |
16.7% |
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Domestic Packaged & Group |
12.0% |
11.3% |
11.1% |
11.7% |
15.3% |
6.7% |
9.0% |
7.9% |
8.7% |
8.3% |
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International |
26.0% |
24.0% |
22.8% |
22.5% |
23.6% |
21.1% |
13.0% |
14.6% |
13.0% |
11.7% |
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International Packaged & Group |
13.0% |
15.5% |
15.0% |
12.2% |
6.9% |
7.2% |
6.0% |
6.9% |
6.9% |
6.0% |
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Sub-total Airline |
81.0% |
79.1% |
75.2% |
68.8% |
63.2% |
52.2% |
46.7% |
46.1% |
45.3% |
42.7% |
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2. |
OTHER |
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Sea Cruising |
2.0% |
1.7% |
1.5% |
3.8% |
4.9% |
9.4% |
10.8% |
11.0% |
13.1% |
11.3% |
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Domestic Coach |
10.0% |
11.3% |
13.0% |
13.0% |
12.8% |
15.0% |
13.5% |
12.2% |
11.7% |
15.9% |
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Domestic Rail (intra & interstate) |
2.0% |
1.4% |
2.4% |
2.2% |
2.5% |
3.9% |
7.8% |
7.4% |
8.2% |
7.4% |
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Hire Car |
0.2% |
0.3% |
2.2% |
2.5% |
6.9% |
8.9% |
9.0% |
10.0% |
9.7% |
11.3% |
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Accommodation |
1.0% |
0.8% |
0.7% |
7.2% |
7.6% |
10.2% |
10.4% |
10.7% |
9.0% |
8.7% |
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Sundry |
3.8% |
5.4% |
5.0% |
2.5% |
2.1% |
0.3% |
1.8% |
2.7% |
3.0% |
2.8% |
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Sub-total Other |
19.0% |
20.9% |
24.8% |
31.2% |
36.8% |
47.8% |
53.3% |
53.9% |
54.7% |
57.3% |
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TOTAL REVENUE |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
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TRAVEL 'N' TOUR |
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COMMISSION HISTORY |
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SCHEDULE 3 |
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AVERAGE COMMISSION RATES |
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1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
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1. |
AIRLINE |
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All figures are expressed to the nearest $'000. |
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Domestic |
9.4% |
9.0% |
9.5% |
9.8% |
10.2% |
12.0% |
12.5% |
13.0% |
15.0% |
15.0% |
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Domestic Packaged & Group |
10.0% |
10.0% |
10.0% |
10.0% |
10.0% |
11.0% |
11.0% |
11.0% |
11.5% |
11.5% |
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International |
8.8% |
9.8% |
10.4% |
9.0% |
9.0% |
9.5% |
9.5% |
10.0% |
10.0% |
10.0% |
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International Packaged & Group |
8.9% |
9.1% |
9.0% |
8.5% |
11.0% |
11.5% |
11.5% |
12.0% |
13.5% |
14.0% |
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2. |
OTHER |
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Sea Cruising |
20.0% |
16.7% |
17.1% |
16.0% |
15.0% |
15.0% |
18.0% |
18.0% |
18.5% |
17.0% |
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Domestic Coach |
11.4% |
12.5% |
12.9% |
11.4% |
11.3% |
11.0% |
10.5% |
10.0% |
9.7% |
9.0% |
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Domestic Rail (intra & interstate) |
20.0% |
20.0% |
16.0% |
13.0% |
11.0% |
9.0% |
9.0% |
9.0% |
10.5% |
10.0% |
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Hire Car |
5.0% |
5.0% |
10.0% |
10.0% |
12.0% |
12.0% |
12.5% |
12.5% |
12.5% |
12.5% |
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Accommodation |
5.0% |
5.0% |
10.0% |
15.0% |
15.0% |
15.0% |
15.0% |
15.0% |
15.0% |
15.0% |
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Sundry |
13.3% |
15.8% |
8.7% |
6.7% |
6.7% |
15.0% |
25.0% |
25.0% |
25.0% |
25.0% |
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COMMISSION EARNINGS |
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SCHEDULE |
4 |
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1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
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1. |
AIRLINE |
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Domestic |
14 |
18 |
23 |
26 |
26 |
37 |
47 |
52 |
75 |
90 |
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Domestic Packaged & Group |
6 |
8 |
10 |
14 |
22 |
13 |
20 |
21 |
30 |
35 |
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International |
11 |
17 |
22 |
24 |
31 |
36 |
25 |
35 |
39 |
42 |
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International Packaged & Group |
6 |
10 |
12 |
12 |
11 |
15 |
14 |
20 |
28 |
30 |
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Sub-total Airline |
37 |
53 |
67 |
77 |
89 |
101 |
105 |
128 |
172 |
197 |
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2. |
OTHER |
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Sea Cruising |
2 |
2 |
2 |
7 |
11 |
26 |
39 |
48 |
73 |
69 |
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Domestic Coach |
6 |
10 |
15 |
18 |
21 |
30 |
28 |
29 |
34 |
51 |
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Domestic Rail (intra & interstate) |
2 |
2 |
4 |
3 |
4 |
6 |
14 |
16 |
26 |
27 |
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Hire Car |
0 |
0 |
2 |
3 |
12 |
19 |
23 |
30 |
37 |
51 |
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Accommodation |
0 |
0 |
1 |
13 |
17 |
28 |
31 |
38 |
41 |
47 |
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Sundry |
3 |
6 |
4 |
2 |
2 |
1 |
9 |
16 |
23 |
25 |
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Sub-total Other |
13 |
20 |
28 |
46 |
66 |
109 |
144 |
177 |
232 |
270 |
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TOTAL COMMISSION |
50 |
73 |
95 |
124 |
155 |
211 |
249 |
305 |
404 |
467 |
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COMMISSION ANALYSIS |
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SCHEDULE |
5 |
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1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
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1. |
AIRLINE |
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|
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|
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Domestic |
28.3% |
24.6% |
24.1% |
21.4% |
16.5% |
17.7% |
18.8% |
17.1% |
18.6% |
19.3% |
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Domestic Packaged & Group |
12.0% |
10.9% |
10.7% |
11.3% |
14.2% |
6.3% |
8.0% |
6.9% |
7.4% |
7.4% |
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International |
22.9% |
22.8% |
22.9% |
19.7% |
19.8% |
17.1% |
9.9% |
11.5% |
9.6% |
9.0% |
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International Packaged & Group |
11.6% |
13.7% |
13.0% |
10.0% |
7.1% |
7.1% |
5.5% |
6.5% |
6.9% |
6.5% |
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Sub-total Airline |
74.9% |
72.1% |
70.7% |
62.4% |
57.5% |
48.2% |
42.2% |
41.9% |
42.6% |
42.2% |
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2. |
OTHER |
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Sea Cruising |
4.0% |
2.7% |
2.5% |
6.0% |
6.8% |
12.1% |
15.6% |
15.6% |
18.0% |
14.8% |
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Domestic Coach |
11.4% |
13.7% |
16.2% |
14.4% |
13.4% |
14.1% |
11.4% |
9.6% |
8.4% |
11.0% |
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Domestic Rail (intra & interstate) |
4.0% |
2.7% |
3.7% |
2.7% |
2.6% |
3.0% |
5.6% |
5.3% |
6.4% |
5.7% |
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Hire Car |
0.1% |
0.1% |
2.1% |
2.4% |
7.7% |
9.1% |
9.0% |
9.8% |
9.0% |
10.9% |
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Accommodation |
0.5% |
0.4% |
0.6% |
10.4% |
10.7% |
13.1% |
12.5% |
12.6% |
10.0% |
10.0% |
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Sundry |
5.1% |
8.2% |
4.2% |
1.6% |
1.3% |
0.4% |
3.6% |
5.2% |
5.6% |
5.4% |
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Sub-total Other |
25.1% |
27.9% |
29.3% |
37.6% |
42.5% |
51.8% |
57.8% |
58.1% |
57.4% |
57.8% |
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TOTAL COMMISSION |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
|
TRAVEL ‘N’ TOUR |
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PROFIT HISTORY |
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SCHEDULE |
6 |
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1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
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TOTAL COMMISSION |
50 |
73 |
95 |
124 |
155 |
211 |
249 |
305 |
404 |
467 |
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LESS EXPENSES |
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Sales Staff |
15 |
24 |
33 |
35 |
45 |
78 |
80 |
100 |
125 |
155 |
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Manager - Selling Time |
20 |
21 |
15 |
13 |
14 |
15 |
15 |
17 |
18 |
24 |
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-Administration Time |
3 |
5 |
11 |
13 |
14 |
15 |
15 |
13 |
14 |
16 |
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Office Staff |
8 |
10 |
11 |
12 |
15 |
19 |
23 |
33 |
33 |
3 |
||||
|
|
Selling Costs |
4 |
4 |
6 |
6 |
12 |
12 |
16 |
24 |
32 |
42 |
||||
|
|
Administration |
6 |
6 |
6 |
6 |
6 |
8 |
9 |
12 |
12 |
15 |
||||
|
|
Finance Costs |
3 |
5 |
10 |
11 |
12 |
12 |
12 |
11 |
10 |
9 |
||||
|
|
Occupancy Costs |
7 |
7 |
7 |
7 |
7 |
10 |
10 |
10 |
17 |
17 |
||||
|
|
Total Expenses |
66 |
82 |
99 |
103 |
125 |
169 |
180 |
220 |
261 |
281 |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Net Profit (Before Tax) |
-16 |
-9 |
-4 |
21 |
30 |
42 |
69 |
85 |
143 |
186 |
||||
|
|
Less Income Tax (40%) |
0 |
0 |
0 |
0 |
9 |
17 |
0 |
0 |
0 |
0 |
||||
|
|
Net Profit (After Tax) |
-16 |
-9 |
-4 |
21 |
21 |
25 |
69 |
85 |
143 |
186 |
||||
|
|
Less Drawings |
0 |
0 |
0 |
0 |
0 |
10 |
20 |
40 |
60 |
80 |
||||
|
|
Net Profit Retained |
-16 |
-9 |
-4 |
21 |
21 |
15 |
49 |
45 |
83 |
106 |
||||
|
EXPENSE ANALYSIS |
|
|
|
|
|
|
|
|
SCHEDULE |
7 |
||
|
|
|
1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
|
|
|
As a % of commission |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Staff |
30.1% |
32.8% |
34.6% |
28.3% |
29.1% |
37.0% |
32.1% |
32.8% |
30.9% |
33.2% |
|
|
|
Manager - Selling Time |
40.1% |
28.7% |
15.7% |
10.5% |
9.0% |
7.1% |
6.0% |
5.6% |
4.5% |
5.1% |
|
|
|
- Administration Time |
6.0% |
6.8% |
11.5% |
10.5% |
9.0% |
7.1% |
6.0% |
4.3% |
3.5% |
3.4% |
|
|
|
Office Staff |
16.0% |
13.7% |
11.5% |
9.7% |
9.7% |
9.0% |
9.2% |
10.8% |
8.2% |
0.6% |
|
|
|
Selling Costs |
8.0% |
5.5% |
6.3% |
4.9% |
7.7% |
5.7% |
6.4% |
7.9% |
7.9% |
9.0% |
|
|
|
Administration |
12.0% |
8.2% |
6.3% |
4.9% |
3.9% |
3.8% |
3.6% |
3.9% |
3.0% |
3.2% |
|
|
|
Finance Costs |
6.0% |
6.8% |
10.5% |
8.9% |
7.7% |
5.7% |
4.8% |
3.6% |
2.5% |
1.9% |
|
|
|
Occupancy Costs |
14.0% |
9.6% |
7.3% |
5.7% |
4.5% |
4.7% |
4.0% |
3.3% |
4.2% |
3.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Expenses |
132.4% |
112.2% |
103.7% |
83.3% |
80.7% |
80.2% |
72.3% |
72.1% |
64.6% |
60.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Profit (Before Tax) |
-32.4% |
-12.2% |
-3.7% |
16.7% |
19.3% |
19.8% |
27.7% |
27.9% |
35.4% |
39.8% |
|
|
|
Less Income Tax (40%) |
0.0% |
0.0% |
0.0% |
0.0% |
5.8% |
7.9% |
0.0% |
0.0% |
0.0% |
0.0% |
|
|
|
Net Profit (After Tax) |
-32.4% |
-12.2% |
-3.7% |
16.7% |
13.5% |
11.9% |
27.7% |
27.9% |
35.4% |
39.8% |
|
|
|
Less Drawings |
0.0% |
0.0% |
0.0% |
0.0% |
0.0% |
4.7% |
8.0% |
13.1% |
14.8% |
17.1% |
|
|
|
Net Profit Retained |
-32.4% |
-12.2% |
-3.7% |
16.7% |
13.5% |
7.1% |
19.7% |
14.7% |
20.6% |
22.6% |
|
|
EXPENSE ANALYSIS |
|
|
|
|
|
|
|
|
|
|
|
|
|
(continued) |
1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales Staff |
15 |
24 |
33 |
35 |
45 |
78 |
80 |
100 |
125 |
155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No. of Sales Staff |
1.0 |
1.5 |
2.0 |
2.0 |
2.5 |
4.0 |
4.0 |
5.0 |
6.0 |
7.0 |
|
|
Manager - Full-time Equivalent |
0.9 |
0.8 |
0.6 |
0.5 |
0.5 |
0.5 |
0.5 |
0.6 |
0.6 |
0.6 |
|
|
Total Sales Staff |
1.9 |
2.3 |
2.6 |
2.5 |
3.0 |
4.5 |
4.5 |
5.6 |
6.6 |
7.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling Hours Capacity (pa) |
1700 |
2550 |
3400 |
3400 |
4250 |
6800 |
6800 |
8500 |
10200 |
11900 |
|
|
Commission Income Per Hour $ |
29.32 |
28.65 |
28.07 |
36.35 |
36.44 |
30.98 |
36.62 |
35.88 |
39.62 |
39.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing Costs |
39 |
49 |
54 |
54 |
71 |
105 |
111 |
141 |
175 |
221 |
|
|
Marketing Costs - Per Hour $ |
22.94 |
19.22 |
15.88 |
15.88 |
16.71 |
15.44 |
16.32 |
16.59 |
17.16 |
18.57 |
|
TRAVEL ‘N’ TOUR |
|
|
BALANCE SHEET HISTORY |
|
SCHEDULE |
8 |
|
|||||||
|
|
ASSETS |
1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
|||
|
CURRENT ASSETS |
|
|
All figures are expressed to the nearest $’000. |
|
|
|
|
|||||||
|
|
Cash |
4 |
15 |
9 |
10 |
11 |
12 |
18 |
30 |
45 |
35 |
|||
|
|
Debtors |
40 |
60 |
110 |
160 |
120 |
219 |
170 |
190 |
290 |
310 |
|||
|
|
Short-term Investments |
49 |
38 |
35 |
35 |
26 |
43 |
47 |
61 |
61 |
52 |
|||
|
|
Pre-paid Tour Expenses |
5 |
8 |
14 |
20 |
40 |
53 |
64 |
69 |
70 |
85 |
|||
|
|
Sub-total |
98 |
121 |
168 |
225 |
197 |
327 |
299 |
350 |
466 |
482 |
|||
|
FIXED ASSETS |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Furniture & Equipment |
5 |
7 |
16 |
20 |
27 |
33 |
37 |
50 |
54 |
67 |
|||
|
|
Less Prov for Depreciation |
-1 |
-2 |
-3 |
-4 |
-5 |
-7 |
-9 |
-14 |
-16 |
-20 |
|||
|
|
Motor Vehicles |
10 |
10 |
10 |
10 |
10 |
25 |
25 |
25 |
25 |
25 |
|||
|
|
Less Prov for Depreciation |
-2 |
-4 |
-6 |
-8 |
-10 |
-3 |
-6 |
-9 |
-12 |
-15 |
|||
|
|
Leasehold Improvements |
4 |
5 |
6 |
6 |
6 |
6 |
10 |
12 |
12 |
12 |
|||
|
|
Less Prov for Depreciation |
-1 |
-2 |
-2 |
-3 |
-3 |
-4 |
-5 |
-6 |
-7 |
-8 |
|||
|
|
Land |
|
8 |
11 |
19 |
73 |
|
|
|
|
30 |
|||
|
|
Sub-total |
15 |
22 |
32 |
40 |
98 |
50 |
52 |
58 |
56 |
91 |
|||
|
INTANGIBLE ASSETS |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Formation Costs |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
|||
|
|
TOTAL ASSETS |
115 |
145 |
202 |
267 |
297 |
379 |
353 |
410 |
524 |
575 |
|||
|
TRAVEL 'N' TOUR |
|
|
BALANCE SHEET HISTORY (Continued) |
|
|
|
|||||||
|
|
LIABILITIES |
1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
||
|
|
|
|
|
|
|
|
|||||||
|
CURRENT LIABILITIES |
|
|
All figures are expressed to the nearest $'000. |
|
|
|
|||||||
|
|
Creditors |
48 |
51 |
94 |
136 |
140 |
186 |
130 |
154 |
201 |
199 |
||
|
|
Customer Deposits |
8 |
19 |
21 |
14 |
15 |
27 |
29 |
32 |
35 |
27 |
||
|
|
Short-term Overdraft |
5 |
30 |
30 |
30 |
30 |
30 |
20 |
20 |
10 |
10 |
||
|
|
Sub-total |
61 |
100 |
144 |
180 |
185 |
243 |
179 |
206 |
246 |
236 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
LONG-TERM LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|||
|
|
Long-term loan |
|
|
|
|
|
30 |
40 |
40 |
80 |
80 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
EQUITY |
|
|
|
|
|
|
|
|
|
|
|||
|
|
Capital at Beginning |
70 |
70 |
70 |
70 |
70 |
70 |
70 |
70 |
70 |
70 |
||
|
|
Plus Retained Profits |
-16 |
-25 |
-12 |
17 |
41 |
36 |
64 |
94 |
128 |
189 |
||
|
|
Sub-total |
54 |
45 |
58 |
87 |
111 |
106 |
134 |
164 |
198 |
259 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
TOTAL LIABILITIES |
115 |
145 |
202 |
267 |
297 |
379 |
353 |
410 |
524 |
575 |
||
|
|
Proof |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
SCHEDULE 9
|
BALANCE SHEET ANALYSIS |
1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
|
|
|
Current Assets |
98 |
121 |
168 |
225 |
197 |
327 |
299 |
350 |
466 |
482 |
|
|
Current Liabilities |
61 |
100 |
144 |
180 |
185 |
243 |
179 |
206 |
246 |
236 |
|
|
WORKING CAPITAL |
37 |
21 |
24 |
45 |
12 |
84 |
120 |
144 |
220 |
246 |
|
|
Current Ratio |
1.61 |
1.21 |
1.16 |
1.25 |
1.06 |
1.34 |
1.67 |
1.70 |
1.89 |
2.04 |
|
|
Average Monthly Overheads |
6 |
7 |
8 |
9 |
10 |
14 |
15 |
18 |
22 |
23 |
|
|
No. of months overhead |
7 |
3 |
3 |
5 |
1 |
6 |
8 |
8 |
10 |
11 |
|
|
NET TANGIBLE ASSETS |
52 |
43 |
56 |
85 |
109 |
104 |
132 |
162 |
196 |
257 |
|
|
Sales Revenue (Turnover) |
500 |
708 |
920 |
1200 |
1440 |
1800 |
2000 |
2400 |
3000 |
3600 |
|
|
Net Tangible Assets/Turnover |
10.4% |
6.1% |
6.0% |
7.1% |
7.6% |
5.8% |
6.6% |
6.7% |
6.5% |
7.1% |
|
|
LONG TERM DEBT |
|
|
|
|
|
30 |
40 |
40 |
80 |
80 |
|
|
Capital at beginning |
70 |
70 |
70 |
70 |
70 |
70 |
70 |
70 |
70 |
70 |
|
|
Accumulated Profit |
-16 |
-25 |
-12 |
17 |
41 |
36 |
64 |
94 |
128 |
189 |
|
|
TOTAL INTERNAL FUNDS |
54 |
45 |
58 |
87 |
111 |
106 |
134 |
164 |
198 |
259 |
|
|
Debt : Equity Ratio |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.28 |
0.30 |
0.24 |
0.40 |
0.31 |
|
|
LONG TERM FUNDS |
54 |
45 |
58 |
87 |
111 |
136 |
174 |
204 |
278 |
339 |
|
|
Internal Funds as % of L.T Funds |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
77.9% |
77.0% |
80.4% |
71.2% |
76.4% |
|
|
ROI - on Assets (before tax) |
-14.0% |
-6.2% |
-1.8% |
7.7% |
10.1% |
11.0% |
19.6% |
20.7% |
27.3% |
32.3% |
|
|
ROI - on Capital (after tax) |
-30.0% |
-19.9% |
-6.2% |
23.7% |
18.7% |
23.6% |
51.5% |
51.8% |
72.3% |
71.7% |
Copyright © Bill Wright 1994