bowling center
TRANSCRIPT
Gold Cup Bowling Centers
BUSINESS PLAN
Business Plan Prepared By
David Rutherford
Chief Financial Officer
3720 Pio Nono Avenue
Macon, Georgia 31206
(912) 781-2096
Date Prepared
April 14, 1999
Business Plan
2
Table of Contents
EXECUTIVE SUMMARY ............................................................................................................. 4
MANAGEMENT AND ORGANIZATION ....................................................................................... 5
Management Team .................................................................................................................. 5Compensation and Ownership................................................................................................... 5Contracts and Franchise Agreements.......................................................................................... 5Board of Directors/Advisory Council.......................................................................................... 6Infrastructure ......................................................................................................................... 6Insurance............................................................................................................................... 6Employee Stock Option Plan and Other Incentives......................................................................... 6Organization Charts ............................................................................................................... 7
PRODUCT AND SERVICE PLAN ................................................................................................. 8
Purpose of the Product/Service .................................................................................................. 8Unique Features ..................................................................................................................... 8Stage of Development............................................................................................................... 8Future Research and Development.............................................................................................. 8Trademarks, Patents, Copyrights, Licenses, Royalties ................................................................... 8Government Approvals ............................................................................................................. 9Product/Service Limitations ...................................................................................................... 9Product Liability .................................................................................................................... 9Related Services and Spin-offs ................................................................................................... 9Facilities ............................................................................................................................... 9Environmental Factors............................................................................................................. 9
MARKETING PLAN .................................................................................................................. 10
Industry Profile .................................................................................................................... 10Current Size ..................................................................................................................................................................................10Growth Potential........................................................................................................................................................................10Geographic Location.................................................................................................................................................................11Industry Trends ...........................................................................................................................................................................11Seasonality Factors ....................................................................................................................................................................11Profit Characteristics .................................................................................................................................................................11Distribution Networks .............................................................................................................................................................11Basis of Competition..................................................................................................................................................................11
Competition Profile............................................................................................................... 11Customer Profile .................................................................................................................. 12Target Market Profile............................................................................................................ 12Gross Margin on Products ..................................................................................................... 12
OPERATING AND CONTROL SYSTEMS .................................................................................. 14
Administrative Policies, Procedures, and Controls ..................................................................... 14Receiving Orders ........................................................................................................................................................................14Paying the Suppliers .................................................................................................................................................................14Reporting to Management ........................................................................................................................................................14Staff Development .......................................................................................................................................................................14Inventory Control.......................................................................................................................................................................14Handling Warranties and Returns .........................................................................................................................................15Monitoring the Company Budgets ........................................................................................................................................15Security Systems .........................................................................................................................................................................15
Business Plan
3
Planning Chart .................................................................................................................... 15Product Development................................................................................................................................................................15Financial Requirements.............................................................................................................................................................15Marketing Flow Chart ...............................................................................................................................................................15Market Penetration.....................................................................................................................................................................16Management and Infrastructure ...............................................................................................................................................16
Risk Analysis........................................................................................................................ 16Salvaging Assets ................................................................................................................... 16
GROWTH PLAN........................................................................................................................ 17
New Offerings to Market ........................................................................................................ 17Capital Requirements ............................................................................................................ 17Personnel Requirements ......................................................................................................... 17Exit Strategy ........................................................................................................................ 17
FINANCIAL PLAN..................................................................................................................... 18
Assumptions......................................................................................................................... 18Sales................................................................................................................................................................................................18Accounts Receivable .................................................................................................................................................................18Inventory Purchases ..................................................................................................................................................................18Accounts Payable.......................................................................................................................................................................18Marketing Expenses...................................................................................................................................................................18Administrative Expenses..........................................................................................................................................................18Capital Expenditures .................................................................................................................................................................19Depreciation/Amortization......................................................................................................................................................19Cash Required..............................................................................................................................................................................19Interest Rates................................................................................................................................................................................19Income Tax.....................................................................................................................................................................................19Break-even Analysis..................................................................................................................................................................19
First Year Cash Flow Projections .................................................................................. Exhibit 1First Year Projected Profit and Loss Statement................................................................. Exhibit 3First Year Pro forma Balance Sheet................................................................................ Exhibit 4Three Year Cash Flow/Projected Profit and Loss Statement................................................ Exhibit 5Three Year Pro forma Balance Sheet ............................................................................... Exhibit 6Financial Analysis/Ratios.............................................................................................. Exhibit 7
SUPPORTING DOCUMENTS........................................................................................APPENDIX
Census informationÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉ.A 1-3Most Popular SportsÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉ B 1Service Industries Ð Bowling CentersÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉ.C 1-
3Payment Schedule of proposed loanÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉ...D 1-
2Floor PlanÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉ... E
1
Business Plan
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Executive SummaryFebruary 8, 1999
Dr. Terry NoelCenter for Entrepreneurship1845 FairmountWichita, Kansas 67260
Dear Dr. Noel:
The concept behind Gold Cup Bowling Centers is to purchase, renovate, and operatebowling centers long-term in small to medium markets beginning in the Southeastern UnitedStates. The object is to buy foreclosed and run-down bowling alleys and leverage against theexisting cash flows to renovate and increase cash flows. The real potential of a bowling alleyis realized after ten years unless refinanced to seed growth. The reason to enter small andmedium markets is to avoid direct competition with other bowling centers. Increasing cashflows is easier without competition nearby.
Bowling is a popular form of family entertainment throughout the United States.However, bowling in the Southeast is not as profitable as the North. This is mainly due tothe mild winters in the South and many actually lose money during the summer. This mayseem like a detriment, but actually allows us to buy bowling alleys at a discount compared toalleys in the North. Bowling alleys also become available because newcomers to the businessdo not understand the inconsistency of cash flows. Experienced operators can turn a failingbowling alley into a profitable venture.
The required capital to enter the market is high and provides a competitive advantagefor the existing alley. The risk when adding a center to a market is more burdensome to thenew center because of debt. The new center will have typically two to three times the debtof existing alleys. Bowling centers do not provide a high return on equity unless leveraged.The return on bowling centers is found in the equity. The first ten years may show a modestprofit, but the ability to leverage against the equity can fuel growth.
We are bowlers, we understand bowlers. We understand bowling centers therefore weoperate only bowling centers. That is all we do.
Respectfully sumitted,
David Rutherford, Chief Financial Officer
Business Plan
5
Management and Organization
Management Team
There are three key management personnel that are also the entrepreneurs for theacquisition of Magnolia Lanes. They include Dallas Rutherford, Sr., Dallas Rutherford, Jr.,and David Rutherford.
Dallas Rutherford, Sr. is the Chief Executive Officer of Gold Cup Bowling Centers withover thirty years of experience in the bowling industry. He was a member of the ProfessionalBowlers Association from 1969-1978. He has been a member of the Bowling ProprietorÕsAssociation of America since 1975, and has served as Vice President and President of theGeorgia BPAA.
Dallas Rutherford, Jr. is currently leasing Magnolia Lanes with the option to buy. He isin charge of day to day operations in Griffin. Dallas has fourteen years of experience inbowling center operation. He has completed BrunswickÕs mechanics school and Managementschool.
David Rutherford is the CFO and is responsible for preparing, presenting, and getting aloan for this acquisition. He has a degree in Entrepreneurship with an emphasis in financefrom Wichita State University (May 99). He has in the past planned and presented arestructuring of Gold Cup debt and obtained consolidated loan saving the companyconsiderable cash flow.
Compensation and Ownership
Currently the compensation package is salary with no stock options. The ownershipdepends on the current shareholders of Gold Cup. The management team will give them anopportunity to purchase Dallas Rutherford, Jr.Õs option to buy. If they approve theacquisition then Dallas will receive a premium above the price in the contract. If shareholdersreject this proposal then the Rutherford family will purchase Magnolia Lanes independentlyof Gold Cup.
Gold Cup is currently a sub S, and a form has not been decided if Magnolia purchase isindependent of Gold Cup. Compensation packages are dependent upon final purchaser.
Contracts and Franchise Agreements
Business Plan
6
Currently managers do not have contracts or noncompete agreements with either GoldCup or Magnolia Lanes.
Board of Directors/Advisory Council
Currently Gold Cup has a small rubber stamp of a board. The board includes DallasRutherford Sr. as Chairman with other seats being held by stockholders. Gold Cup does nothave any outside board members and does not pay or give stock options to the Board ofDirectors. Most of the Board is not involved in day to day operations or have a backgroundin the bowling industry.
Infrastructure
The key advisors of Gold Cup include:
Greg Allen Ð bankerMr. Allen is in charge of Gold CupÕs account with SunTrust bank.
Gene Harrington Ð attorneyMr. Harrington has been the attorney of Gold Cup since 1984.
Wilbur Lister Ð accountantMr. Lister is the CPA for Gold Cup.
Insurance
Gold Cup does not have a functional buy-sell agreement in place. A functional buy-sellagreement will be in effect upon approval by stockholders. The corporation does not insureany stockholders or key management personnel.
Employee Stock Option Plan and Other Incentives
Gold Cup and Magnolia Lanes do not have an employee stock option plan orincentive plan other than employee discounts.
Business Plan
7
Organization Charts
Gold Cup Structure
Willis WardCenter ManagerRussell ParkwayWarner Robins
Tom ShimekCenter Manager
Pio NonoMacon
Jimmy AllenCenter ManagerNorth HoustonWarner Robins
Joe PattersonCenter Manager
Macon BowlMacon
Dallas Rutherford, Sr.CEO
75 employees
Magnolia Lanes
WandaAssistant Manager
PatHead Mechanic
Dallas Rutherford, Jr.Manager
Business Plan
8
Product and Service Plan
Purpose of the Product/Service
The products and services provided by Gold Cup satisfy the needs of consumers for asafe, indoor, all-season, all-weather recreation facility. The properties include bowling lanesequipped with bumper bowling for children, automatic scoring, automatic pinsetters, videoarcade, snack bar and bar under one roof.
Bowling is unique in that participation may be individually or with a group. Bowling isenjoyed as a competitive sport and as recreation for millions of people every year.
Bowling competes for the same disposable income that movie theaters, miniature golfand other non-essential recreation.
Unique Features
Bowling allows men, women, the young and the old to enjoy competing on a levelplaying field in a relaxed environment. Bowling can be enjoyed no matter what the weather islike outside.
Stage of Development
Bowling has reached maturity in terms of product cycle. The main changes are inenvironment. Bowling centers built today have higher ceilings and bright colors. This is moreappealing to customers.
Future Research and Development
There is currently no research and development by bowling centers. Typicallyindependent centers follow the lead of Brunswick and AMF.
Trademarks, Patents, Copyrights, Licenses, Royalties
There are no trademarks, patents, copyrights, licenses, or royalties for our operation.
Business Plan
9
Government Approvals
We will need approval for a business license, liquor license, and food service license.We will also need tax identification number and workersÕ compensation coverage.
Product/Service Limitations
We will not have any service limitations other than operating at full capacity which would bea welcome problem.
Product Liability
We carry general insurance and liability insurance. There have been numerous lawsuitsfiled against bowling operations. There have been very few successful. In addition there hasnever been a successful lawsuit when Remo Picchietti was called as a defense expert witness.Picchietti is a lawyer that has represented bowling throughout his career and has strong ties tohelp the bowling industry.
Our operations will not provide a nursery service for our bowlers because of liabilityconcerns.
Related Services and Spin-offs
We will not have any spin-offs. We will open a bowling supply operation when wehave enough centers. The bowling supply will provide pro shop equipment such as bowlingballs, shoes, and bowling bags.
Facilities
The facilities are contained within a 21,684 square foot building. The buildingincludes 24 lanes for bowling, game room, restaurant, and bar. (floorplan attached)
Environmental Factors
We will have very little impact on the environment short-term. The main concern isthat the grease in the grease traps in the kitchen area are disposed of properly. We also havespecial recycling centers located within the bowling center. The aluminum cans are sold to arecycling company with the proceeds going to support youth bowlers in the center.
Business Plan
10
Marketing Plan
Industry Profile
Current Size
The U.S. bowling center industry is highly fragmented, and consists of two relativelylarge bowling center operators, AMF (which had 370 U.S. centers as of December 31, 1997)and Brunswick Corporation (which had approximately 111 U.S. centers as of December 31,1997), four medium-sized chains, which together account for 70 bowling centers, and over5,300 bowling centers owned by single-center and small-chain operators, which typicallyown four or fewer centers. The top six operators account for less than 10% of the totalnumber of U.S. bowling centers.(SEC Filing AMF).
From 1982 to 1992 revenues nationwide were 2.8 billion dollars (service industriesUSA, 2nd Edition). I estimate that revenues are currently about 3.0 billion dollars.
The state of Georgia has approximately seventy centers statewide. Approximaterevenues for bowling is 35.5 million.
Locally in Spalding County there is one Bowling center operating. This center is theproposed acquisition.
Growth Potential
In the United States, the operation of bowling centers is a mature industry characterizedby slightly decreasing lineage (games per lane per day) offset by increasing average price pergame and revenue from food and beverage and other sources.
The growth potential is acquisitions. The bowling industry is fragmented with agingfacilities. Most operators are doing so for income, but few have the ability to borrow moneyto upgrade facilities to extend the life of the location. There are currently few new centersopening nationwide. The operators of bowling centers rarely have an exit strategy. There isthe growth potential of buying locations at a discount because a bowling center is illiquid.There are very few buyers, therefore bowling centers sell at a discount based on cash flows.
Business Plan
11
Geographic Location
Most centers are located in the North and retirement states. These states have more bowlingcenters per capita than the south. There are bowling centers in every state in the UnitedStates.(Services Industries USA, 2nd Edition)
Industry Trends
The trends in the industry are modernizing facilities similar to new movie theatres. Glowbowling is a new fad that allows bowlers to bowl with the lights out using glow in the darklanes, balls, pins with loud music playing in a dance-like atmosphere.
Seasonality Factors
Seasonality in Georgia causes most centers to actually lose money through the summer.We have two league seasons. Fall season September through April and Summer season Junethrough August.
Profit Characteristics
Bowling centers have an average profit margin of about 3 percent. However Gold CupBowling Centers have a (net income + interest expense + depreciation)/sales=26%. Thatthree percent is only that low while paying off large amounts of debt. Bowling centers areconsidered cash cows when debt is retired.
Distribution Networks
The distribution network is only available to customers that visit our location. Bowlingis a service that can only be enjoyed on the property.
Basis of Competition
The bowling industry can be very competitive especially during the summer in Georgia.This is why we locate in smaller markets that can only support one operation. Thisconsumer monopoly of bowling allows us to avoid price-cutting competitors.
Competition Profile
Business Plan
12
Our competitive advantage is being the only bowling center available to an area. Weunderstand the wants and needs of bowlers and cater to them. The nearest bowling center isabout thirty miles away in Newnan, Georgia.
Customer Profile
The intended profiles of our customers are people looking to go out and have a goodtime. We try to get 15-25 year olds of either gender to bowl. We try to establish aconnection to bowling. We want them to bowl a lifetime. Most of our customers are bluecollar workers, senior citizens, and young adults. We want these young adults to have aconnection with bowling before they find other activities.
Target Market Profile
Our target market is Spalding County. Spalding County has a population of about57,000 residents. (Appendix ) The target market is comprised mainly of blue-collar workers.The population of blue-collar workers is expected to increase because a new plant providing3000 new jobs is opening in late 1998. The market has already been penetrated by existingbowling center.
Spalding County has 60% high school graduates and 11.1% college graduates. Therewere 10,490 children enrolled in elementary or high school in 1990. Most of these childrenwould now fill our customer profile.
Spalding County may not experience tremendous growth, but this is to our advantage.This lack of growth will be a barrier to entry for new competition. Spalding County cansupport one bowling center, but not two.
Gross Margin on Products
Our pricing policies are consistent with the bowling industry.
Cost of GoodsBowling 0%Lounge 33%Snack Bar 40%ProShop 50%Arcade 0%
Business Plan
13
The costs associated with bowling are essentially fixed. The maintenance should bethe same whether you a full house operating or empty. The lanes and machines still need tobe oiled and taken care of appropriately. The better care you take care of these capitalexpenditures the longer they will bring in income.
The lounge operates at approximately a 3-to1 markup. This is consistent with mostlounge operations. The snack bar has about a forty-percent cost of goods. There arenumerous products that vary in markup, but historically we have operated at this levelsuccessfully.
The pro shop is where we sell things such as bowling balls, shoes, bags, and otheraccessories. We have historically had a fifty-percent cost of goods, but this is beginning toweaken. The reason for this is online distributors of bowling equipment. We can compensatefor this by charging a higher cost to customers that bring in bowling balls to be drilled.
The arcade has a cost of electricity. The bowling center contracts out to anindependent business. The business supplies arcade machines and the income is split fifty-fifty. This allows the bowling center arcade income without maintaining and buying gamemachines.
Business Plan
14
Operating and Control Systems
Administrative Policies, Procedures, and Controls
Receiving Orders
Customers are served on a fist come first served basis. The customer is issued a laneand shoes if needed. The customer is allowed to bowl and pays for the number of gamesbowled upon completion. We will also have league bowlers that participate at the same timeand day every week for a slightly discounted rate. There is not a database to track open playcustomers, but we offer secretarial duties to keep track of the league standings and thereforehave access to all of our league bowlers addresses and phone numbers.
Paying the SuppliersSuppliers are paid in a timely fashion. We have set up with suppliers to send one
monthly invoice for us to pay. Currently we match our invoices with all our receipts. Thisis really not that difficult considering the limited number of suppliers we deal with. Allalcohol deliveries are paid by check upon delivery. This is necessary by state law.
Reporting to Management
Employees are responsible for reporting any and all incidents to a supervisor ormanager. Management meetings will be weekly between center manager, assistant managerand corporate representative. The meetings will be used to relay ideas and problems to andfrom parties present.
Staff DevelopmentTraining is provided in-house with majority of training as on the job training.
Promotions to management are possible, but rare due to low turnover of management.
Inventory Control
Magnolia lanes utilize a manual inventory system. The bowling industry in theSoutheast is very seasonal with large fluctuations in bar and grill inventories. Reorder pointsare constantly changing throughout the year.
Business Plan
15
Handling Warranties and Returns
We only provide warranties on pro shop equipment. We do not accept returns becausebowling balls are custom fit. We will replace product if we are at fault. We are notresponsible for damage done to balls thrown down the lane. The reason is bowling balls arecomposed of softer materials like urethane and reactive resins. The ball returns were designedto send back hard rubber bowling balls not these state of the art concepts.
Monitoring the Company Budgets
We currently budget by percentages of sales. The information is updated monthly.Large deviation in the budget are quickly investigated to resolve potential continuation ofproblem.
Security SystemsWe have off-duty police officers in uniform patrol the property on Friday and Saturday
nights from 9:00p.m. to 3:00a.m. Magnolia lanes have a well-lit parking lot with windowslooking out over the parking lot.
Planning Chart
Product Development
Magnolia Lanes is currently operating in Griffin, Georgia. The building and interior willbe upgraded upon obtaining financing.
Financial RequirementsThe financing will be needed by November 1, 1999. The necessary loan will be
$900,000. Gold Cup will put $300,000 into the operation. $780,000 to purchase thebusiness and $420,000 to upgrade the facilities. Gold Cup, Inc. would like an interest rateswap. The swap should provide us with a fixed rate at November 1,1999 prime with monthlypayments retiring the note on November 1, 2009. The bank will hold a first on the Griffinproperty and a personal guarantee of Dallas Rutherford, Sr.
Marketing Flow ChartMagnolia Lanes will continue current advertising until completion of upgrades to the
property.
Business Plan
16
Market PenetrationMagnolia Lanes is the only bowling center in Griffin. Market penetration is set until
renovations can be made to improve customer satisfaction.
Management and InfrastructureManagement team is hired and in place.
Risk Analysis
The risk for our business would be another bowling center enter the market. Themarket is not large enough for two bowling centers. Neither center would make any money.We would sell our center to the person that wanted a bowling center in Griffin, Georgia thatbad.
Our sales projections are based on actual figures of past performance of this centerwith historical costs of Gold Cup Centers. We are capable of operating more efficiently thanprevious management. Gold Cup is able to get better financing and better insurance thanindividual centers. Our experience and knowledge allow us to improve profitability.
Salvaging Assets
The market is at a low for pinsetters and the fixtures would bring very little. Thebuilding and property would bring about $450,000. The bank could get about $550,000 foreverything.
Business Plan
17
Growth Plan
New Offerings to Market
Currently we are looking at building a new center in North Macon. Projected revenuesare approximately $600,000 per year at an initial cost of 2.2 million dollars
Capital Requirements
The 2.2 million will buy the property, build the bowling center, and buy fixtures.Equipment and lanes will be provided by Gold Cup.
Personnel Requirements
The operation will need approximately 16 employees and an assistant manager. JoePatterson is already employed by Gold Cup and would be the center manager.
Exit Strategy
The company would have the option of going public or be acquired by a national chainof bowling centers (AMF or Brunswick).
Business Plan
18
Financial Plan
Assumptions
Sales
I am basing sales off of existing figures. We will have better figures because DallasRutherford, Jr. is currently operating the business, which will show cash flows withoutrenovations. These numbers will be accurate and determine if the opportunity is feasible.
Accounts Receivable
Magnolia Lanes will not have accounts receivable.
Inventory Purchases
Inventories are based off of historical sales at the Griffin location.
Accounts Payable
Suppliers provide terms of net 30 except alcohol that must be paid upon delivery.
Marketing Expenses
The marketing expenses are expected to be incurred in May and August. May is thebeginning of summer for us and we utilize this time to build leagues that bowl in the summer.August is the end of summer for our business and we finish building our fall leagues at thistime.
Administrative Expenses
Salaries and wages are somewhat fixed. We can cut hours if business slows, but wealways need at minimum a skeleton staff while open. These costs can also rise if minimumwage rises. Many of our hourly employees work at minimum wage or slightly above. Ourpayroll taxes are proportionate with payroll. Dues, Accounting and professional fees areexpected to be relatively fixed.
Business Plan
19
Capital Expenditures
The capital expenditures will include security deposits, but the bulk of expenses will bepurchasing the business and improvements made to the facilities. Improvements will be madewithout closing the business down. The figures shown include improvements as if they havebeen completed.
Depreciation/Amortization
The building will be depreciated straight-line for thirty years. The equipment will bedepreciated straight-line for ten years and the furniture and fixtures straight-line for fiveyears.
Cash Required
The cash required to purchase Magnolia Lanes and make improvements will need 1.2 milliondollars. Gold Cup will invest 300,000 dollars with the remainder being financed by debt.
Interest Rates
The last loan obtained by Gold Cup in August of 1998 was fixed at 8.5%. Rates havefallen slightly since that time. The figures used in this business plan is based off of 8.5%fixed.
Income Tax
Gold Cup is a S-corporation and shareholders are taxed based upon their tax bracket andtheir portion of the companies net income or net loss. This allows Gold Cup stockholders tobe taxed once instead of twice while retaining limited liability. Stockholders are able to writeoff any paper losses that may occur.
Break-even Analysis
The breakeven point will be $402,000 considering cost of $357,000 and a gross marginof 89%.
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#2
Fin
anci
al P
lan
INV
EN
TO
RY
BU
DG
ET
JAN
FE
BM
AR
AP
RM
AY
JUN
JUL
AU
GSE
PO
CT
NO
VD
EC
YE
AR
Cos
t of
Goo
ds S
old:
Pro
duct
5,39
0
4,95
0
4,40
0
3,96
0
2,97
0
2,97
0
3,41
0
3,41
0
3,96
0
3,96
0
3,96
0
3,96
0
47,3
00
Cos
t of
Goo
ds S
old:
Pro
duct
ion
-
-
-
-
-
-
-
-
-
-
-
-
-
Cos
t of
Goo
ds S
old
5,39
0
4,95
0
4,40
0
3,96
0
2,97
0
2,97
0
3,41
0
3,41
0
3,96
0
3,96
0
3,96
0
3,96
0
47,3
00
Gro
ss M
argi
n43
,610
40,0
50
35
,600
32,0
40
24
,030
24,0
30
27
,590
27,5
90
32
,040
32,0
40
32
,040
32,0
40
38
2,70
0
Gro
ss M
argi
n Pe
rcen
tage
89.0
%89
.0%
89.0
%89
.0%
89.0
%89
.0%
89.0
%89
.0%
89.0
%89
.0%
89.0
%89
.0%
89.0
%
INV
EN
TO
RY
MA
NA
GE
ME
NT
Inve
ntor
y Pu
rcha
ses
(Cas
h)5,
400
5,
000
4,
450
4,
000
2,
950
2,
950
3,
400
3,
400
4,
000
3,
900
4,
000
3,
900
47
,350
Inve
ntor
y Pu
rcha
ses
(Cre
dit)
-
Paid
on
Acc
ount
(Su
pplie
rs)
-
Bal
ance
of
Inve
ntor
y (P
urch
ased
)10
60
11
0
15
0
13
0
11
0
10
0
90
130
70
11
0
50
PR
OD
UC
TIO
N E
XP
EN
SES
Sala
ries
& W
ages
Em
ploy
ee B
enef
itsPa
yrol
l Tax
esSu
bcon
trac
ting
Rep
airs
& M
aint
enan
ceFr
eigh
t-in
& T
ruck
ing
Ren
tU
tiliti
esIn
sura
nce
Rew
ork
Oth
er P
rodu
ctio
n E
xpen
ses
Prod
uctio
n E
xpen
ses
(Tot
al)
-
-
-
-
-
-
-
-
-
-
-
-
-
Bal
ance
of
Inve
ntor
y (P
rodu
ctio
n)-
-
-
-
-
-
-
-
-
-
-
-
Bal
ance
of
Inve
ntor
y (T
otal
)10
60
11
0
15
0
13
0
11
0
10
0
90
130
70
11
0
50
Inve
ntor
y w
ill b
e co
mpr
ised
of
food
item
s fo
r th
e sn
ack
bar,
alc
ohol
for
the
bar
and
chip
s an
d dr
inks
for
ven
ding
mac
hine
s
Gro
ss M
argi
n Pe
rcen
tage
is f
igur
ed u
sing
his
tori
cal d
ata
from
oth
er b
owlin
g ce
nter
s w
e op
erat
e
Bu
dg
et
Fo
rm #
3F
inan
cial
Pla
n
EX
PE
NS
E B
UD
GE
TM
AR
KE
TIN
G E
XP
EN
SE
S
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
TOTAL
Sala
ries
& C
omm
issi
ons
- Sa
les
Em
ploy
ee B
enef
itsPa
yrol
l Tax
es -
Sal
esA
dver
tisin
g -
Bro
adca
stA
dver
tisin
g -
Prin
tA
dver
tisin
g -
Dir
ect M
ail
Adv
ertis
ing
- O
ther
2000
2000
4000
Mar
ketin
g -
Prin
tM
arke
ting
- Sa
mpl
es/T
rade
Sho
ws
Oth
er M
arke
ting
Exp
ense
s
Mar
ketin
g E
xpen
ses
(Tot
al)
00
00
2000
00
2000
00
00
4000
Not
es &
Exp
lana
tions
:A
dver
tisin
g a
bow
ling
alle
y in
a s
mal
l mar
ket g
ives
ver
y sm
all r
esul
ts.
One
can
rec
eive
bet
ter
resu
lts b
y a
char
ity f
undr
aise
r.W
e w
ill h
ave
adve
rtis
ing
in M
ay to
pro
mot
e su
mm
er le
ague
s an
d in
Aug
ust t
o pr
omot
e w
inte
r le
ague
s
Bud
get F
orm
#4
Fin
anci
al P
lan
EX
PE
NS
E B
UD
GE
TA
DM
INIS
TR
AT
IVE
EX
PE
NS
ES
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
TOTAL
Sala
ries
& W
ages
1000
010
000
1000
010
000
1000
010
000
1000
010
000
1000
010
000
1000
010
000
1200
00E
mpl
oyee
Ben
efits
Payr
oll T
axes
800
800
800
800
800
800
800
800
800
800
800
800
9600
Mea
ls &
Ent
erta
inm
ent
Due
s &
Sub
scri
ptio
ns17
517
517
517
517
517
517
517
517
517
517
517
521
00Pr
ofes
sion
al F
ees
200
200
200
200
200
200
200
200
200
200
200
200
2400
Acc
ount
ing/
Boo
kkee
ping
200
200
200
200
200
200
200
200
200
200
200
200
2400
Tra
vel/A
utom
obile
Oth
er A
dmin
Exp
ense
s
Adm
inis
trat
ive
Exp
ense
s (T
otal
)11
375
1137
511
375
1137
511
375
1137
511
375
1137
511
375
1137
511
375
1137
513
6500
Not
es &
Exp
lana
tions
:Sa
lari
es a
nd w
ages
are
bas
ed o
ff o
f cu
rren
t lev
els.
The
se m
ay b
e lo
wer
dur
ing
the
sum
mer
.Pa
yrol
l tax
es a
re b
ased
off
of
hist
oric
al f
igur
es.
Due
s w
ill b
e pa
id to
hav
e sa
nctio
ned
lane
s, B
PAA
mem
bers
hip,
Bet
ter
Bus
ines
s B
urea
u an
d Sp
aldi
ng C
ount
y C
ham
ber
of C
omm
erce
Bud
get F
orm
#5
Fin
anci
al P
lan
EX
PE
NS
E B
UD
GE
TG
EN
ER
AL
EX
PE
NS
ES
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
TOTAL
Ban
k C
harg
es50
5050
5050
5050
5050
5050
5060
0In
tere
st E
xpen
se63
7563
4163
0662
7262
3862
0361
6861
3260
9760
6160
2559
8874
206
Insu
ranc
e12
0012
0012
0012
0012
0012
0012
0012
0012
0012
0012
0012
0014
400
Off
ice
Supp
lies
150
2525
2525
2525
150
2525
2525
550
Oth
er S
uppl
ies
150
150
150
150
150
150
150
150
150
150
150
150
1800
Post
age
5050
5050
5050
5050
5050
5050
600
Tel
epho
ne22
522
522
522
522
522
522
522
522
522
522
522
527
00U
tiliti
es25
0025
0023
0023
0028
0030
0031
0032
0030
0028
0028
0026
0032
900
Ren
tR
epai
rs &
Mai
ntan
ence
1100
1100
1100
1100
1100
1100
1100
1100
1100
1100
1100
1100
1320
0T
axes
& L
icen
ses
1200
1200
1200
1200
1200
1200
1200
1200
1200
1200
1200
1200
1440
0O
ther
Gen
eral
Exp
ense
s
Gen
eral
Exp
ense
s (T
otal
)13
000
1284
112
606
1257
213
038
1320
313
268
1345
713
097
1286
112
825
1258
815
5356
Not
es &
Exp
lana
tions
:90
0,00
0 do
llar
note
at 8
.5%
inte
rest
rat
e fo
r a
peri
od o
f 10
yea
rs.
Pmt o
f 12
398.
57/m
onth
Rep
airs
and
Mai
nten
ance
cos
ts a
re to
kee
p m
achi
nes
oper
atin
g. T
his
cost
will
dro
p af
ter
our
mec
hani
cs h
ave
gotte
n th
em b
ack
to s
tand
ard
Util
ity b
ills
will
flu
ctua
te b
ased
upo
n tim
e of
yea
r
Bud
get F
orm
#6
Fin
anci
al P
lan
CA
PIT
AL
BU
DG
ET
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
TOTAL
Ow
ner's
Cap
ital/S
tock
-
O
wne
r's D
raw
/Dis
trib
utio
ns-
Inve
stor
's C
apita
l/Sto
ck30
0,00
0
300,
000
Inve
stor
's D
raw
/Dis
trib
utio
ns-
Div
iden
ds P
aid
-
Loa
ns (
Cas
h B
orro
wed
)90
0,00
0
900,
000
Loa
n Pr
inci
pal P
aym
ents
4,78
3
4,81
7
4,85
1
4,88
6
4,92
0
4,95
5
4,99
0
5,02
6
5,06
1
5,09
7
5,13
3
5,16
9
59,6
88
Secu
rity
Dep
osits
6,00
0
6,00
0
Star
t-up
Exp
ense
s25
,000
25,0
00
Am
ortiz
atio
n-
Equ
ipm
ent
240,
000
24
0,00
0
E
quip
men
t Dep
reci
atio
n2,
000
2,
000
2,
000
2,
000
2,
000
2,
000
2,
000
2,
000
2,
000
2,
000
2,
000
2,
000
24
,000
Fu
rnitu
re60
,000
60,0
00
Furn
iture
Dep
reci
atio
n1,
000
1,
000
1,
000
1,
000
1,
000
1,
000
1,
000
1,
000
1,
000
1,
000
1,
000
1,
000
12
,000
L
ease
hold
Im
prov
emen
ts-
Lea
seho
ld D
epre
ciat
ion
-
V
ehic
les
-
V
ehic
les
Dep
reci
atio
n-
Bui
ldin
g72
0,00
0
720,
000
Bui
ldin
g D
epre
ciat
ion
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
24,0
00
Lan
d15
0,00
0
150,
000
Not
es &
Exp
lana
tions
:in
vest
or's
cap
ital i
s a
300,
000
equi
ty p
ositi
on
Loa
ns is
the
900,
000
dolla
rs r
eque
sted
to b
uy b
usin
ess
star
t-up
exp
ense
s ar
e to
buy
cur
rent
inve
ntor
ies,
and
ope
ratin
g ca
shE
quip
men
t is
the
amou
nt p
aid
for
the
Equ
ipm
ent f
or d
epre
ciat
ion
purp
oses
. 10
year
dep
reci
atio
n sc
hedu
leFu
rnitu
re is
the
amou
nt p
aid
for
the
Furn
iture
for
dep
reci
atio
n pu
rpos
es. 5
yea
r de
prec
iatio
n sc
hedu
leB
uild
ing
is th
e am
ount
pai
d fo
r th
e bu
ildin
g fo
r de
prec
iatio
n pu
rpos
es. 3
0 ye
ar d
epre
ciat
ion
sche
dule
Bud
get F
orm
#7
Fin
anci
al P
lan
GO
LD
CU
P B
OW
LIN
GC
ASH
-FL
OW
ST
AT
EM
EN
T
JAN
FE
BM
AR
AP
RM
AY
JUN
JUL
AU
GSE
PO
CT
NO
VD
EC
TO
TA
L
Cas
h R
ecei
pts:
Sale
s (C
ash)
49,0
00
45
,000
40,0
00
36
,000
27,0
00
27
,000
31,0
00
31
,000
36,0
00
36
,000
36,0
00
36
,000
430,
000
Sale
s (C
redi
t Car
ds)
-
-
-
-
-
-
-
-
-
-
-
-
-
R
ecei
ved
on A
ccou
nt (
RO
A)
-
-
-
-
-
-
-
-
-
-
-
-
-
O
ther
Inc
ome
-
-
-
-
-
-
-
-
-
-
-
-
-
O
wne
r's C
apita
l/Sto
ck-
-
-
-
-
-
-
-
-
-
-
-
-
Inve
stor
's C
apita
l/Sto
ck30
0,00
0
-
-
-
-
-
-
-
-
-
-
-
300,
000
Loa
ns (
Cas
h B
orro
wed
)90
0,00
0
-
-
-
-
-
-
-
-
-
-
-
900,
000
T
otal
Cas
h R
ecei
pts
1,24
9,00
0
45
,000
40,0
00
36
,000
27,0
00
27
,000
31,0
00
31
,000
36,0
00
36
,000
36,0
00
36
,000
1,63
0,00
0
Cas
h D
isbu
rsem
ents
:R
etur
ns a
nd A
llow
ance
s (C
ash)
-
-
-
-
-
-
-
-
-
-
-
-
-
In
vent
ory
Purc
hase
s (C
ash)
5,40
0
5,00
0
4,45
0
4,00
0
2,95
0
2,95
0
3,40
0
3,40
0
4,00
0
3,90
0
4,00
0
3,90
0
47,3
50
Paid
on
Acc
ount
(Su
pplie
rs)
-
-
-
-
-
-
-
-
-
-
-
-
-
Pr
oduc
tion
Exp
ense
s (T
otal
)-
-
-
-
-
-
-
-
-
-
-
-
-
Mar
ketin
g E
xpen
ses
(Tot
al)
-
-
-
-
2,00
0
-
-
2,00
0
-
-
-
-
4,00
0
Adm
inis
trat
ive
Exp
ense
s (T
otal
)11
,375
11,3
75
11
,375
11,3
75
11
,375
11,3
75
11
,375
11,3
75
11
,375
11,3
75
11
,375
11,3
75
13
6,50
0
G
ener
al E
xpen
ses
(Tot
al)
13,0
00
12
,841
12,6
06
12
,572
13,0
38
13
,203
13,2
68
13
,457
13,0
97
12
,861
12,8
25
12
,588
155,
356
Ow
ner's
Dra
w/D
istr
ibut
ions
-
-
-
-
-
-
-
-
-
-
-
-
-
In
vest
or's
Dra
w/D
istr
ibut
ions
-
-
-
-
-
-
-
-
-
-
-
-
-
D
ivid
ends
Pai
d-
-
-
-
-
-
-
-
-
-
-
-
-
Loa
n Pr
inci
pal P
aym
ents
4,78
3
4,81
7
4,85
1
4,88
6
4,92
0
4,95
5
4,99
0
5,02
6
5,06
1
5,09
7
5,13
3
5,16
9
59,6
88
Star
t-up
Exp
ense
s25
,000
-
-
-
-
-
-
-
-
-
-
-
25,0
00
Secu
rity
Dep
osits
6,00
0
-
-
-
-
-
-
-
-
-
-
-
6,00
0
Equ
ipm
ent
240,
000
-
-
-
-
-
-
-
-
-
-
-
24
0,00
0
Fu
rnitu
re60
,000
-
-
-
-
-
-
-
-
-
-
-
60,0
00
Lea
seho
ld I
mpr
ovem
ents
-
-
-
-
-
-
-
-
-
-
-
-
-
V
ehic
les
-
-
-
-
-
-
-
-
-
-
-
-
-
B
uild
ing
720,
000
-
-
-
-
-
-
-
-
-
-
-
72
0,00
0
L
and
150,
000
-
-
-
-
-
-
-
-
-
-
-
15
0,00
0
Tot
al C
ash
Dis
burs
ed1,
235,
558
34,0
33
33
,282
32,8
33
34
,283
32,4
83
33
,033
35,2
58
33
,533
33,2
33
33
,333
33,0
32
1,
603,
894
Beg
inni
ng C
ash
Bal
ance
$013
,442
24,4
09
31
,127
34,2
94
27
,011
21,5
28
19
,495
15,2
37
17
,704
20,4
71
23
,138
26,1
06
Net
Cas
h F
low
13,4
42
10
,967
6,71
8
3,16
7
(7,2
83)
(5,4
83)
(2,0
33)
(4,2
58)
2,46
7
2,76
7
2,66
7
2,96
8
26,1
06
End
ing
Cas
h B
alan
ce13
,442
24,4
09
31
,127
34,2
94
27
,011
21,5
28
19
,495
15,2
37
17
,704
20,4
71
23
,138
$26,
106
Exh
ibit
1F
inan
cial
Pla
n
GO
LD
CU
P B
OW
LIN
GP
RO
JEC
TE
D M
ON
TH
LY
IN
CO
ME
ST
AT
EM
EN
T
JAN
FE
BM
AR
AP
RM
AY
JUN
JUL
AU
GSE
PO
CT
NO
VD
EC
TO
TA
L
Rev
enue
:G
ross
Sal
es49
,000
45,0
00
40
,000
36,0
00
27
,000
27,0
00
31
,000
31,0
00
36
,000
36,0
00
36
,000
36,0
00
43
0,00
0
L
ess:
Ret
urns
and
Allo
wan
ces
-
-
-
-
-
-
-
-
-
-
-
-
-
N
et S
ales
49,0
00
45
,000
40,0
00
36
,000
27,0
00
27
,000
31,0
00
31
,000
36,0
00
36
,000
36,0
00
36
,000
430,
000
Cos
t of
Sale
s5,
390
4,
950
4,
400
3,
960
2,
970
2,
970
3,
410
3,
410
3,
960
3,
960
3,
960
3,
960
47
,300
G
ross
Pro
fit
43,6
10
40
,050
35,6
00
32
,040
24,0
30
24
,030
27,5
90
27
,590
32,0
40
32
,040
32,0
40
32
,040
382,
700
Exp
ense
s:M
arke
ting
Exp
ense
s-
-
-
-
2,
000
-
-
2,
000
-
-
-
-
4,
000
A
dmin
istr
ativ
e E
xpen
ses
11,3
75
11
,375
11,3
75
11
,375
11,3
75
11
,375
11,3
75
11
,375
11,3
75
11
,375
11,3
75
11
,375
136,
500
Gen
eral
Exp
ense
s13
,000
12,8
41
12
,606
12,5
72
13
,038
13,2
03
13
,268
13,4
57
13
,097
12,8
61
12
,825
12,5
88
15
5,35
6
A
mor
tizat
ion
-
-
-
-
-
-
-
-
-
-
-
-
-
B
ad D
ebt E
xpen
se-
-
-
-
-
-
-
-
-
-
-
-
-
Dep
reci
atio
n5,
000
5,
000
5,
000
5,
000
5,
000
5,
000
5,
000
5,
000
5,
000
5,
000
5,
000
5,
000
60
,000
T
otal
Ope
ratin
g E
xpen
ses
29,3
75
29
,216
28,9
81
28
,947
31,4
13
29
,578
29,6
43
31
,832
29,4
72
29
,236
29,2
00
28
,963
355,
856
Net
Ope
ratin
g In
com
e (L
oss)
14
,235
10,8
34
6,
619
3,
093
(7
,383
)
(5
,548
)
(2
,053
)
(4
,242
)
2,
568
2,
804
2,
840
3,
077
26
,844
O
ther
Inc
ome
-
-
-
-
-
-
-
-
-
-
-
-
-
Net
Inc
ome
(Los
s) B
efor
e T
axes
14,2
35
10
,834
6,61
9
3,09
3
(7,3
83)
(5,5
48)
(2,0
53)
(4,2
42)
2,56
8
2,80
4
2,84
0
3,07
7
26,8
44
Not
es a
nd E
xpla
natio
ns:
Gro
ss S
ales
are
adj
uste
d fo
r ty
pica
l sea
sona
lity.
Cos
t of
sale
s ta
kes
into
acc
ount
the
perc
enta
ge a
nd ty
pe o
f re
venu
eD
epre
ciat
ion
was
str
aigh
t lin
e an
d w
ill b
e co
nsta
nt u
ntil
year
6 o
r ot
her
capi
tal i
mpr
ovem
ents
hav
e be
en m
ade
The
sum
mer
mon
ths
are
sche
dule
d to
hav
e a
loss
Exh
ibit
2F
inan
cial
Pla
n
GOLD CUP BOWLINGPROJECTED PROFIT AND LOSS STATEMENT
Year Ending December 31, 1999
RevenueGross Sales $430,000
Less: Returns & Allowances - Net Sales 430,000 100.0%Cost of Sales 47,300 11.0%Gross Profit 382,700 89.0%
Operating ExpensesMarketing Expenses
Salaries & Commissions - Sales - 0.0%Employee Benefits - 0.0%Payroll Taxes - Sales - 0.0%Advertising - Broadcast - 0.0%Advertising - Print - 0.0%Advertising - Direct Mail - 0.0%Advertising - Other 4,000 0.9%Marketing - Print - 0.0%Marketing - Samples/Trade Shows - 0.0%Other Marketing Expenses - 0.0%
Administrative ExpensesSalaries & Wages 120,000 27.9%Employee Benefits - 0.0%Payroll Taxes 9,600 2.2%Meals & Entertainment - 0.0%Dues & Subscriptions 2,100 0.5%Professional Fees 2,400 0.6%Accounting/Bookkeeping 2,400 0.6%Travel/Automobile - 0.0%Other Admin Expenses - 0.0%
General ExpensesBank Charges 600 0.1%Interest Expense 74,206 17.3%Insurance 14,400 3.3%Office Supplies 550 0.1%Other Supplies 1,800 0.4%Postage 600 0.1%Telephone 2,700 0.6%Utilities 32,900 7.7%Rent - 0.0%Repairs & Maintanence 13,200 3.1%Taxes & Licenses 14,400 3.3%Other General Expenses - 0.0%
Amortization - 0.0%Bad Debt Expense - 0.0%Depreciation 60,000 14.0%Total Operating Expenses 355,856 82.8%
Net Operating Income (Loss) $26,844 6.2%Other Income - Net Income (Loss) Before Taxes $26,844
Exhibit 3 Financial Plan
GOLD CUP BOWLING
PRO FORMA BALANCE SHEET
Year Ending December 31, 1999
Assets
Current Assets
Cash and Equivalents $26,106
Accounts Receivable -
net of allowance for bad debts -
Inventory 50
Prepaid Expenses 31,000
Total Current Assets $57,156
Fixed Assets
Equipment 240,000
Equipment Depreciation 24,000
Furniture 60,000
Furniture Depreciation 12,000
Leasehold Improvements -
Leasehold Depreciation -
Vehicles -
Vehicles Depreciation -
Building 720,000
Building Depreciation 24,000
Land 150,000
Total Fixed Assets 1,170,000
Less: Accumulated Depreciation 60,000
Total Fixed Assets, Net 1,110,000
Total Assets $1,167,156
Liabilities
Current Liabilities
Accounts Payable (Suppliers) -
Long Term Liabilities
Loans Outstanding/Other Payables 840,312
Total Liabilities $840,312
Equity
Capital 300,000
Retained Earnings 26,844
Total Equity $326,844
Total Liabilities and Equity $1,167,156
Exhibit 4 Financial Plan
GOLD CUP BOWLING
THREE-YEAR BUDGET
1999 2000 2001
Sales (Cash & Credit Cards) 430,000 440,000 450,000
Sales (Credit) -
Returns and Allowances (Cash) -
Received on Account (ROA) -
Yearly Gross Sales $430,000 $440,000 $450,000
Cost of Goods Sold 47,300 48,246 49,211
Gross Margin 382,700 391,754 400,789
Gross Margin Percentage 89.0% 89.0% 89.1%
Marketing Expenses 4,000 4,100 4,200
Administrative Expenses 136,500 133,881 136,558
General Expenses 155,356 153,695 149,647
Amortization -
Bad Debt Expense -
Depreciation 60,000 88,400 71,000
Total Expenses 355,856 380,076 361,405
Net Operating Income (Loss) Before Taxes $26,844 $11,678 $39,384
Other Income -
Net Income (Loss) Before Taxes $26,844 $11,678 $39,384
Income Tax 7,516 3,270 11,028
Net Income (Loss) After Taxes $19,328 $8,408 $28,356
Inventory/Raw Material Purchases (Cash) 47,350 48,246 49,211
Inventory/Raw Material Purchases (Credit) -
Value Added by Production -
Paid on Account (Suppliers) -
Owner's Capital/Stock -
Owner's Draw/Distributions -
Investor's Capital/Stock 300,000
Investor's Draw/Distributions -
Dividends Paid -
Loans (Cash Borrowed) 900,000
Loan Principal Payments 59,688 64,971 70,714
Equipment 240,000
Furniture 60,000
Leasehold Improvements -
Vehicles -
Building 720,000
Land 150,000
Cumulative Cash Flow 18,590 50,427 79,069
General expenses will drop because interest expense will more than offset rise of other general expenses
Exhibit 5 Financial Plan
GOLD CUP BOWLING
NOTES FOR THREE YEAR BUDGET
2000 2001
Sales (Cash & Credit Cards) all cash sales
Sales (Credit) no credit sales
Returns and Allowances (Cash)
Received on Account (ROA)
Cost of Goods Sold should remain constant should remain constant
Marketing Expenses very little advertising in small market
Administrative Expenses assume 2% rise yearly
General Expenses assume 2% rise yearly
Depreciation 3 separate depreciation schedules for furniture, equipment, and building
Income Tax assume 28 % tax rate
Inventory Purchases (Cash) all purchases have been cash
Inventory Purchases (Credit)
Paid on Account (Suppliers)
Owner's Capital/Stock
Owner's Draw/Distributions no draws or dividends
Loans (Cash Borrowed) borrowed @ 8.5% for 10 years
Loan Principal Payments 64971 70714
Equipment Depreciated at 10 year straight line
Furniture depreciated at 5 year straight line
Leasehold Improvements
Vehicles
Building depreciated at 30 year straight
Land listed at Historical
Exhibit 5b Financial Plan
GOLD CUP BOWLING
THREE-YEAR PRO FORMA BALANCE SHEET
1999 2000 2001
Assets
Current Assets
Cash and Equivalents 26,106 50,427 79,069
Accounts Receivable - - -
net allowance for bad debts - - -
Inventory 50 50 50
Prepaid Expenses 31,000 31,000 31,000
Total Current Assets $57,156 $81,477 $110,119
Fixed Assets
Equipment 240,000 240,000 240,000
Furniture 60,000 60,000 60,000
Leasehold Improvements - - -
Vehicles - - -
Building 720,000 720,000 720,000
Land 150,000 150,000 150,000
Total Fixed Assets 1,170,000 1,170,000 1,170,000
Less: Accumulated Depreciation 60,000 148,400 219,400
Total Fixed Assets, Net 1,110,000 1,021,600 950,600
Total Assets $1,167,156 $1,103,077 $1,060,719
Liabilities
Current Liabilities
Accounts Payable (Suppliers) - - -
Long Term Liabilities
Loans Outstanding/Other Payables 840,312 775,341 704,627
Total Liabilities $840,312 $775,341 $704,627
Equity
Capital 300,000 300,000 300,000
Retained Earnings 26,844 27,736 56,092
Total Equity $326,844 $327,736 $356,092
Total Liabilities and Equity $1,167,156 $1,103,077 $1,060,719
Exhibit 6 Financial Plan
GOLD CUP BOWLING
FINANCIAL RATIOS
1999 2000 2001
Profit Ratios
Profit to Sales Net Operating Income 0.06 0.03 0.09
Yearly Gross Sales
Profit on Net Worth Net Operating Income 0.08 0.04 0.11
Total Equity
Return on Total Capital Employed Net Operating Income 0.02 0.01 0.04
Total Assets
Current Position or Liquidity Ratios
Current Ratio Current Assets 0.00 0.00 0.00
Current Liabilities
Acid Test Ratio Cash and Equivalents 0.00 0.00 0.00
Current Liabilities
Accounts Receivable to Sales Accounts Receivable 0.00 0.00 0.00
Yearly Gross Sales
Inventory Cost of Goods Sold 946.00 964.92 984.22
Inventory
Capital Structure Ratios
Fixed Asset to Net Worth Fixed Assets 3.40 3.12 2.67
Total Equity
Total Debt to Net Worth Total Liabilities 2.57 2.37 1.98
Total Equity
Operating Activity Ratios
Sales to Net Worth Yearly Gross Sales 1.32 1.34 1.26
Total Equity
Sales to Total Assets Yearly Gross Sales 0.37 0.40 0.42
Total Assets
Exhibit 7 Financial Plan