bed and breakfast inn

7/29/2019 Bed and Breakfast Inn

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Bed and Breakfast Inn (Guesthouse) Business Plan

Strawberry Guest House

Executive Summary

The Magnolia Inn is a beautiful facility that sits atop a bluff overlooking the Pacific Ocean inscenic Half Moon Bay California. The Inn offers seven individually furnished rooms, each withits own antique theme. We are a complete bed and breakfast Inn with a full complementarybreakfast served each morning to our guests. Magnolia's target market strategy is based onbecoming a destination of choice for professional couples in the greater San Francisco Bay areawho are looking for a place to relax and recharge. We will also advertise to the newly marriedcouple who is looking for that special get away. It will be important for us to be visible to those

potential guests who are traveling on Highway 101 through Half Moon Bay.

The Magnolia will have an eye catching sign that will alert potential customers and drop-ins ofour existence. We will use the Yellow Pages in the Bay area to market our Inn, as well as a Webpage on the Internet which will focus on the features the Inn has to offer. Each room will bedisplayed with its unique decor, as well the outside of the Inn showing the beautiful gardens andviews of the Pacific Ocean. Attractions within 30 miles of the Inn will be displayed withinformation about our shuttle service, room rates and directions. The Magnolia is confident thatit will not take long to build a following that will put us at full capacity within the next year. TheInn would like to see steady growth with a average of over 90% capacity for Year 1, with profitsalso growing at a rate of 10%.

Jim and Nancy Anderson are the sole owners of the Magnolia and live at the Inn year around.The Andersons are hands-on owners who oversee every aspect of the Inn's operations. A smallstaff consisting of a cook and a maid will work at the Inn. The cook will work 20 hours per weekand the maid will be on the payroll 40 hours per week as she will also help Nancy takereservations and watch the front desk when needed. Nancy will oversee the inside operationsworking with the maid and cook as well as taking reservations. Jim will oversee the maintenanceof the Inn and grounds and drive the van to shuttle guests when the need arises. Both Jim and Nancy

will promote the Inn and oversee the advertising.

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1.1 Mission

The Magnolia Inn intends to provide a serene setting for our guests to enjoy the many splendorsof the beautiful California coast. Each guest will be treated with the kind of attention that isreserved for family. When our guests arrive we want them to leave their troubles at the door and

step into a world of luxury and rest. As owners we intend to see that attention to detail andservice will be followed by a staff dedicated to each guest.

1.2 Keys to Success

The primary keys to success for the Inn will be based on the following factors:

Provide a facility that is first class with attention to detail. Give each guest a sense that he or she is our top priority. Provide quality meals. Retain our guests to ensure repeat bookings and referrals.

1.3 Objectives

1. Generate a customer satisfaction rate above 90%.2. Generate an average of $26,000 of sales each month.3. Stay above 90% occupancy each month.

Company Summary

The Magnolia Inn is a beautiful facility that sits atop a bluff over looking the Pacific Ocean inscenic Half Moon Bay California. We are a new start-up enterprise that will offer sevenwonderfully furnished rooms to guests who want to get away from the ordinary. Each room isindividually furnished with antiques and there is a large deck with a hot tub overlooking theocean. The Magnolia will provide a full breakfast each morning to our guests with no expensespared. Our target market is the professional couple who lives in the San Francisco area, orpeople looking for a place to honeymoon.

2.1 Company Ownership

The Magnolia Inn is owned and operated solely by Jim and Nancy Anderson. Jim and Nancyhave refurbished a beautiful victorian home to accommodate 14 guests at a time in seven rooms.

This is a start-up enterprise for the Andersons who are equal owners in the business. Jim andNancy purchased the property a little over a year ago and have worked this past year preparing toopen the Inn.

2.2 Start-up Summary

The start-up costs will come to $38,000 (including cash required at start-up) which will beprimarily financed by Jim and Nancy Anderson. Joe Anderson, Jim's father has contributed$15,000 into the enterprise. The costs of improvements to the building totaled $30,000. Jim andNancy purchased the property a year ago with the intent of renovating and opening the business.

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Start-up Expenses

Legal $500

Stationery etc. $500

Insurance $500

Improvements toInn

$30,000

Flowers $500

Total Start-upExpenses

$32,000

Start-up Assets

Cash Required $6,000

Other Current

Assets $10,000Long-term Assets $370,000

Total Assets $386,000

Total Requirements $418,000

Start-up Funding

Start-up Expenses to Fund $32,000

Start-up Assets to Fund $386,000

Total Funding Required $418,000

Assets

Non-cash Assets from Start-up $380,000Cash Requirements fromStart-up

$6,000

Additional Cash Raised $0

Cash Balance on Starting Date $6,000

Total Assets $386,000

Liabilities and Capital

Liabilities

Current Borrowing $0

Long-term Liabilities $353,000

Accounts Payable(Outstanding Bills)

$0

Other Current Liabilities(interest-free)

$0

Total Liabilities $353,000

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Capital

Planned Investment

Jim & Nancy Anderson $50,000

Joe Anderson $15,000

Additional InvestmentRequirement $0

Total Planned Investment $65,000

Loss at Start-up (Start-upExpenses)

($32,000)

Total Capital $33,000

Total Capital and Liabilities $386,000

Total Funding

Services

The Magnolia Inn provides four-star lodging on the beautiful central California coast. We are acomplete bed and breakfast Inn with a full complementary breakfast served each morning. Sevenimpeccable rooms, each with its own theme are ready to embrace the individual who is lookingfor solitude, or the more adventurish person who likes to be active. We offer van trips to variouslocations of interest if guests are interested.

Market Analysis Summary

The Magnolia Inn's target market strategy is based on becoming a destination choice for peoplein the greater San Francisco Bay region who are looking for a place to relax and recharge. The

target markets that we are going to pursue are people looking for a vacation destination,Honeymooners, and drop-in customers. We envision many professional married and singlecustomers making the short drive to Half Moon Bay from the greater Bay area to relax and enjoythe beautiful California coast. Our setting and facility is a natural for people looking for a placeto spend their honeymoon. With an eye catching sign on highway 101 we will bring in drop-inbusiness. The Magnolia would like to see a 10% increase of potential customers on a yearlybasis.

4.1 Market Segmentation

The profile of our customer consists of the following geographic and demographic information.

Geographics

Our immediate geographic market is the San Francisco Bay area with a population ofover one million people.

A 200-mile geographic area would want to use the kind of services we offer. The total target area population is estimated at two million people.

Demographics

Male and female. Married and single. Combined annual income in excess of $75,000. Age range of 25 to 65 years. with a median age of 40. Work in a professional business setting.

(pag 4)


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Market AnalysisYear 1 Year 2 Year 3 Year 4 Year 5

PotentialCustomers

Growth CAGR

Vacationers 10% 800,000 880,000 968,000 1,064,800 1,171,280 10.00%

Honeymooners 10% 5,000 5,500 6,050 6,655 7,321 10.00%

Drop-ins 10% 1,000 1,100 1,210 1,331 1,464 10.00%

Total 10.00% 806,000 886,600 975,260 1,072,786 1,180,065 10.00%

4.2 Target Market Segment Strategy

Our target market strategy is based on becoming a destination for people who are looking to getaway for a few days, on the beautiful California coast. Our marketing strategy is based onsuperior performance in the following areas:

Quality facilities. Beautiful location. Customer service.

The target markets are separated into three segments; "Vacationers," "Honeymooners," and"Drop-ins." The primary marketing opportunity is selling to these accessible target market

segments that focuses on vacation and recreational needs.

Vacationers

The most dominant segment of the three is comprised of the San Francisco Bay and surroundingarea. Half Moon Bay is approximately a 45 minute drive for Bay area residents. Half Moon Baycan seem like a different world and this is attractive for those people who have the need to getaway but do not have the time to go far.

Honeymooners

Because of the beauty and location of our Inn, we will be a very attractive choice for peoplelooking for a honeymoon location.

Drop-ins

When rooms are available we will welcome the drop-in customer who is looking for a place tostay for the night. Our sign can be seen from highway 101 and we expect to get quite a few drop-ins.

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4.3 Service Business Analysis

The Magnolia Inn is a seven room facility that provides over night lodging and breakfast in aluxurious setting on the beautiful California Coast. There are several other Inns in the area aswell as motels. Most people who need lodging in the area make reservations in advance to assure

room availability. Two other Bed and Breakfast Inns, the Riptide Inn, and the Bayshore Inn areour main competitors.

4.3.1 Competition and Buying Patterns

Typically in this industry the consumer is someone who is not just looking for a room to sleep in,but a facility that provides a homespun touch. A place that is unique and offers morepersonalized customer service. Because each Inn is offering something unique to the guest,customer service and quality of the facilities are at the forefront of importance. Location is alsoimportant and those Inns with an ocean view have an advantage, but with the limited number ofrooms at Inns in the area there are enough customers to match the supply. The Magnolia will not

be competing on price as the price of a room is on the high end of the scale. Guests at theMagnolia are paying for more than just a room, they are paying for a oasis away from theirhectic world.

Market Analysis Summary

The Magnolia Inn's target market strategy is based on becoming a destination choice for peoplein the greater San Francisco Bay region who are looking for a place to relax and recharge. Thetarget markets that we are going to pursue are people looking for a vacation destination,Honeymooners, and drop-in customers. We envision many professional married and singlecustomers making the short drive to Half Moon Bay from the greater Bay area to relax and enjoythe beautiful California coast. Our setting and facility is a natural for people looking for a placeto spend their honeymoon. With an eye catching sign on highway 101 we will bring in drop-inbusiness. The Magnolia would like to see a 10% increase of potential customers on a yearlybasis.

4.1 Market Segmentation

The profile of our customer consists of the following geographic and demographic information.

Geographics

Our immediate geographic market is the San Francisco Bay area with a population ofover one million people.

A 200-mile geographic area would want to use the kind of services we offer. The total target area population is estimated at two million people.

Demographics

Male and female. Married and single. Combined annual income in excess of $75,000. Age range of 25 to 65 years. with a median age of 40. Work in a professional business setting.

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Market AnalysisYear 1 Year 2 Year 3 Year 4 Year 5

PotentialCustomers

Growth CAGR

Vacationers 10% 800,000 880,000 968,000 1,064,800 1,171,280 10.00%

Honeymooners 10% 5,000 5,500 6,050 6,655 7,321 10.00%

Drop-ins 10% 1,000 1,100 1,210 1,331 1,464 10.00%

Total 10.00% 806,000 886,600 975,260 1,072,786 1,180,065 10.00%

4.2 Target Market Segment Strategy

Our target market strategy is based on becoming a destination for people who are looking to getaway for a few days, on the beautiful California coast. Our marketing strategy is based onsuperior performance in the following areas:

Quality facilities. Beautiful location. Customer service.

The target markets are separated into three segments; "Vacationers," "Honeymooners," and"Drop-ins." The primary marketing opportunity is selling to these accessible target market

segments that focuses on vacation and recreational needs.

Vacationers

The most dominant segment of the three is comprised of the San Francisco Bay and surroundingarea. Half Moon Bay is approximately a 45 minute drive for Bay area residents. Half Moon Baycan seem like a different world and this is attractive for those people who have the need to getaway but do not have the time to go far.

Honeymooners

Because of the beauty and location of our Inn, we will be a very attractive choice for peoplelooking for a honeymoon location.

Drop-ins

When rooms are available we will welcome the drop-in customer who is looking for a place tostay for the night. Our sign can be seen from highway 101 and we expect to get quite a few drop-ins.

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4.3 Service Business Analysis

The Magnolia Inn is a seven room facility that provides over night lodging and breakfast in aluxurious setting on the beautiful California Coast. There are several other Inns in the area aswell as motels. Most people who need lodging in the area make reservations in advance to assure

room availability. Two other Bed and Breakfast Inns, the Riptide Inn, and the Bayshore Inn areour main competitors.

4.3.1 Competition and Buying Patterns

Typically in this industry the consumer is someone who is not just looking for a room to sleep in,but a facility that provides a homespun touch. A place that is unique and offers morepersonalized customer service. Because each Inn is offering something unique to the guest,customer service and quality of the facilities are at the forefront of importance. Location is alsoimportant and those Inns with an ocean view have an advantage, but with the limited number ofrooms at Inns in the area there are enough customers to match the supply. The Magnolia will not

be competing on price as the price of a room is on the high end of the scale. Guests at theMagnolia are paying for more than just a room, they are paying for a oasis away from theirhectic world.

Strategy and Implementation Summary

The primary sales and marketing strategy for Magnolia includes these factors:

To offer a bed and breakfast facility that will appeal to the busy professional. To provide unmatched customer service to our guests. To concentrate our marketing in the greater San Francisco Bay area.

5.1 Competitive Edge

The Magnolia Inn sets itself apart from similar competition in the following ways.

Location: The sheer beauty of our setting is a huge plus. Nestled on a bluff with apanoramic view of the Pacific Ocean the Magnolia is the ideal place to take in mothernature. Beautiful magnolia trees and a garden area makes this setting a truly magnificentplace.

Our rooms: Each room is individually decorated with antiques that are tasteful butcomfortable. You feel as if you have stepped back in time, as luxury is present at everyturn.

Customer service: Customer service is our number one priority. The Magnolia will treateach guest as if they are family.

5.2 Marketing Strategy

Our marketing strategy is based on becoming a destination for vacationers and honeymoonerswho are looking for truly beautiful and unique lodgings. With the greater San Francisco Bay areaour main target market the Magnolia will use several different approaches to advertise ourfacility. We will use the Yellow Pages to advertise, as well as develop a Web page that will showour beautiful Inn. On highway 101 we will have an eye catching sign that will alert potentialdrop-ins of our existence. The Magnolia is confident that it will not take long with word-of-mouth from past customers, to build up to full capacity.

5.3 Sales Strategy

Our prime location with a beautiful ocean view and a quality facility will be an attractive choicefor our potential customers. Each room is decorated individually with antiques and quality


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furnishings made to feel just like home. A hot tub on the deck overlooking the ocean is providedfor our guests. A first class breakfast is served each morning with no expense spared. Guests willhave several options on our menu so that we can accommodate most tastes. There are several funand interesting destination spots within 30 minutes of the Inn and we will have a van ready toshuttle guests if they need the service. The Magnolia guest will feel pampered and will leave for

home well rested.

5.3.1 Sales Forecast

The sales forecast table is broken down into two main revenue streams: Reservations and Drop-ins. The sales forecast for the upcoming year is based on a 10% growth rate for direct sales. TheMagnolia has seven rooms to offer its guests at a rate of $175.00 per night. We expect the rate ofrooms occupied to increase as the year progresses. In spite of the economic unpredictability weare experiencing, these projections appear attainable and take the increasing base intoconsideration. Growth rates for the years 2005 and 2006 are based on percentage increases asfollows:

Reservations: 10% growth rate per year. Drop-ins: 10% growth rate per year.

Sales Forecast

Year 1 Year 2 Year 3

Sales

Reservations $294,140 $323,554 $355,909

Drop-ins $47,690 $52,459 $57,705

Total Sales $341,830 $376,013 $413,614

Direct Cost of Sales Year 1 Year 2 Year 3

Reservations $14,707 $14,000 $16,000

Drop-ins $2,385 $7,000 $8,000

Subtotal Direct Cost of Sales $17,092 $21,000 $24,000


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5.4 Milestones

The milestones table below outlines key activities that will be critical to our success. Owners Jimand Nancy Anderson will take care of these important activities.

Milestones

Milestone Start Date End Date Budget Manager Department

Business Plan 1/8/2003 2/8/2003 $500 Jim Management

Web Development 3/7/2003 5/4/2003 $1,000 Nancy Management

Marketing 5/12/2003 7/1/2003 $3,000 Nancy Management

Accounting Plan 6/8/2003 7/9/2003 $500 Jim Management

Totals $5,000

Web Plan Summary

The Magnolia Inn website will focus on the features the Inn has to offer. Each room with itsunique decor will be on the site as well as pictures of the Inn and the surrounding gardens andgrounds over looking the Pacific Ocean. The breakfast menu will be displayed with pictures ofthe food laid out in the dining room. Room rates will be given with maps on how to get to the

Inn. Attractions within 30 miles will be on the site and other local color will be shown.Reservations can be made online if the consumer wishes to do so.

6.1 Website Marketing Strategy

Our website marketing strategy will focus on professional couples who are looking for a vacationdestination that is both close and elegant. The Bay area will be our main focal point. TheMagnolia will promote through our website by using:

Detailed photos of the Inn and surrounding area. Price list of our rooms and a menu of our breakfast. Maps from many points of the Bay area that lead to the Inn.

6.2 Development Requirements

Co-owner Nancy Anderson will develop the website. The site itself will take several months todevelop and it will be an ongoing effort to add new information to the site as we see necessary.Nancy has a degree in computer science and extensive experience working with websites. Every


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aspect of the site will be handled by Nancy including company logo, Web page format, andmaintenance of the site. AOL Web services will host the site.

Management Summary

Jim and Nancy Anderson are the sole owners of the Magnolia Inn. A small staff consisting of acook and maid will work at the Inn. The rest of the tasks will be done by Jim and Nancy. Jim isresponsible for the outside maintenance of the grounds and of the Inn. He will also drive the vanfor guests when the need arises. Nancy will organize the day to day operations on the inside andhandle reservations. Both Jim and Nancy will promote the Inn through the advertising methodsdiscussed in the marketing strategy section. Nancy will also work with the cook to purchase thefood served at the Inn.

7.1 Personnel Plan

Jim and Nancy sold a small motel a year and a half ago with the intent of finding the ideal

location for a bed and breakfast. The personnel plan consists of Jim and Nancy's schedule plusthat of the staff. Stacie, our cook will work 20 hours per week and will help with the shoppingfor the supplies. Carol will work full time preparing rooms and helping with taking reservationsand watching the Inn when Jim or Nancy cannot be there. Jim and Nancy will live at the Inn withtheir own quarters on site. Jim's dad will receive $500 dollars each month until the $15,000dollars he invested is payed back. The total payroll equates to $111,000 including the $57,000dollars that Jim and Nancy will take out as their salary.

Personnel Plan


Owners $57,000 $65,000 $65,000Full time Staff $48,000 $52,000 $54,000

Total People 4 4 4

Total Payroll $105,000 $117,000

Financial Plan

The Magnolia Inn expects business to grow steadily until we are at an average of over 90%capacity for the year 2004 with a conservative capacity rate of 50% expected at times. We willbe growing slowly with profits growing at a rate of about 10%. Expenses will be well managed,

allowing Magnolia to make a profit even if the capacity rate drops as low as 50%.

8.1 Important Assumptions

The following critical assumptions will determine the potential for future success.

A healthy economy that supports a moderate level of growth in our market. Keeping operating costs as low as possible, particularly in the areas of personnel and our

ongoing monthly expenses.

General Assumptions


Plan Month 1 2 3

Current InterestRate

9.50% 9.50% 9.50%

Long-termInterest Rate

8.50% 8.50% 8.50%


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Tax Rate 28.17% 28.00% 28.17%

Other 0 0 0

8.2 Break-even Analysis

The following chart and table summarize our break-even analysis. Our fixed costs will be$17,000 per month at the onset and we expect to reach the break-even point within the first fewmonths of operation.

Need actual charts?

We recommend using LivePlan as the easiest way to create graphs for your own business plan.

Break-even Analysis

Monthly Revenue Break-even $18,487

Assumptions:

Average Percent Variable Cost 5%

Estimated Monthly Fixed Cost $17,563

8.3 Projected Profit and LossThe following represents the Projected Profit and Loss for theMagnolia Inn based on sales and expense projections for 2004 and b

eyond.


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Pro Forma Profit and Loss


Sales $341,830 $376,013 $413,614

Direct Cost of Sales $17,092 $21,000 $24,000

Other Costs of Sales $12,000 $14,000 $16,000

Total Cost of Sales $29,092 $35,000 $40,000

Gross Margin $312,739 $341,013 $373,614

Gross Margin % 91.49% 90.69% 90.33%

ExpensesPayroll $105,000 $117,000 $119,000

Sales and Marketing and Other Expenses $12,000 $14,000 $16,000

Depreciation $0 $0 $0

Rent $48,000 $48,000 $48,000

Utilities $12,000 $14,000 $16,000

Insurance $6,000 $7,000 $8,000

Payroll Taxes $15,750 $17,550 $17,850

Other $12,000 $3,000 $0

Total Operating Expenses $210,750 $220,550 $224,850

Profit Before Interest and Taxes $101,989 $120,463 $148,764

EBITDA $101,989 $120,463 $148,764

Interest Expense $29,885 $29,660 $29,411

Taxes Incurred $20,188 $25,425 $33,618

Net Profit $51,916 $65,378 $85,736

Net Profit/Sales 15.19% 17.39% 20.73%

8.4 Projected Cash Flow

The Cash Flow projections are outlined below. Again, these projections are based on our basicassumptions with revenue generation factors carrying the most significant weight regarding theoutcome. We are anticipating that we will not need to invest any additional capital into thebusiness with a healthy cash flow in place.


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Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $341,830 $376,013 $413,614

Subtotal Cash from Operations $341,830 $376,013 $413,614

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 $0New 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 $341,830 $376,013 $413,614

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $105,000 $117,000 $119,000

Bill Payments $169,225 $193,409 $207,626

Subtotal Spent on Operations $274,225 $310,409 $326,626Additional 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 $2,646 $2,831 $3,029

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $0 $0

Dividends $6,000 $6,000 $3,000

Subtotal Cash Spent $282,871 $319,240 $332,655

Net Cash Flow $58,959 $56,773 $80,959

Cash Balance $64,959 $121,732 $202,692


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8.5 Projected Balance Sheet

The Balance Sheet in the following table shows sufficient growth and a very acceptable financialposition. The monthly estimates are included and shown in the appendix.

Pro Forma Balance SheetYear 1 Year 2 Year 3

Assets

Current Assets

Cash $64,959 $121,732 $202,692

Other Current Assets $10,000 $10,000 $10,000

Total Current Assets $74,959 $131,732 $212,692

Long-term Assets

Long-term Assets $370,000 $370,000 $370,000

Accumulated Depreciation $0 $0 $0

Total Long-term Assets $370,000 $370,000 $370,000

Total Assets $444,959 $501,732 $582,692

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $15,689 $15,915 $17,168

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $15,689 $15,915 $17,168

Long-term Liabilities $350,354 $347,523 $344,494

Total Liabilities $366,043 $363,438 $361,662

Paid-in Capital $65,000 $65,000 $65,000

Retained Earnings ($38,000) $7,916 $70,294

Earnings $51,916 $65,378 $85,736

Total Capital $78,916 $138,294 $221,030

Total Liabilities and Capital $444,959 $501,732 $582,692

Net Worth $78,916 $138,294 $221,030

8.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on theStandard Industrial Classification (SIC) code 7011.0401, Bed and Breakfast Inns are shown forcomparison.

The following will enable us to keep on track. If we fail in any of these areas we will need to re-evaluate our business mode:

Month-to-month annual comparisons indicate an increase of 10% or greater. Do not depend on credit line to meet cash requirements.

Ratio Analysis

Year 1 Year 2 Year 3 IndustryProfile

Sales Growth 0.00% 10.00% 10.00% 7.24%

Percent of Total Assets

Other Current Assets 2.25% 1.99% 1.72% 22.48%

Total Current Assets 16.85% 26.26% 36.50% 27.08%


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Long-term Assets 83.15% 73.74% 63.50% 72.92%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 3.53% 3.17% 2.95% 14.60%

Long-term Liabilities 78.74% 69.26% 59.12% 32.80%

Total Liabilities 82.26% 72.44% 62.07% 47.40%

Net Worth 17.74% 27.56% 37.93% 52.60%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 91.49% 90.69% 90.33% 100.00%

Selling, General & AdministrativeExpenses

76.30% 73.30% 69.55% 67.52%

Advertising Expenses 0.00% 0.00% 0.00% 2.55%

Profit Before Interest and Taxes 29.84% 32.04% 35.97% 0.36%

Main Ratios

Current 4.78 8.28 12.39 1.00

Quick 4.78 8.28 12.39 0.76

Total Debt to Total Assets 82.26% 72.44% 62.07% 59.90%

Pre-tax Return on Net Worth 91.37% 65.66% 54.00% 0.24%

Pre-tax Return on Assets 16.20% 18.10% 20.48% 0.60%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 15.19% 17.39% 20.73% n.a

Return on Equity 65.79% 47.27% 38.79% n.a

Activity Ratios

Accounts Payable Turnover 11.79 12.17 12.17 n.a

Payment Days 27 30 29 n.aTotal Asset Turnover 0.77 0.75 0.71 n.a

Debt Ratios

Debt to Net Worth 4.64 2.63 1.64 n.a

Current Liab. to Liab. 0.04 0.04 0.05 n.a

Liquidity Ratios

Net Working Capital $59,270 $115,817 $195,524 n.a

Interest Coverage 3.41 4.06 5.06 n.a

Additional Ratios

Assets to Sales 1.30 1.33 1.41 n.a

Current Debt/Total Assets 4% 3% 3% n.aAcid Test 4.78 8.28 12.39 n.a

Sales/Net Worth 4.33 2.72 1.87 n.a

Dividend Payout 0.12 0.09 0.03 n.a

Submitted by :

APPLE CRYSTAL S. DASDAS

bed and breakfast inn

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