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HB 358 Individual Assignment #2 NAME: Spartan Hotel Information You have been assigned to prepare and analyze pro forma financial statements for the Spartan Hotel. The Spartan Hotel is a full service 260 room property which is in the process of being purchased by a group of private investors. The property has been fully renovated with the exception of the hotel's restaurant which in the process of construction and will be open in January 2021 at a cost of $780,000. The hotel has historically had an average room rate of $160 per night with an average occupancy rate of 88% annually. The total food and beverage revenues for 2021 are expected to be unchanged at $860,000 for the year. The hotel's food and beverage department has traditionally had an 80% to 20% mix of food beverage revenues. Other income generated mostly from in-room services and is equal to 3% of the hotel's total rooms revenue. Cost of sales percentage will remain constant for the 4 years. After meeting with the investors, management and the controller of the hotel you have been given the following infomation and forecasted figures in order to prepare the 2021-2024 pro forma income statement and the 2021-2024 pro forma balance sheet. Assume all expense percentages remain constant except where increases are noted. Ingnore the fact that 2024 is a leap year. 2022 Rooms revenues will increase by 3.5% over 2021 Food and Beverage revenues will increase by $4400 per day over 2021 Other income will increase by 1.25% over 2021 Salaries, wages and benefits will increase by 0.6% over 2021 Ulilities expenses will increase by 0.4% over 2021 2023 Rooms revenues will increase by 5% over 2022 Food and Beverage revenues will increase by 12% over 2022 Other income will increase by 1.0% over 2022 Salaries, wages and benefits will increase by 0.8% over 2022 Direct operating expenses will increase by 0.4% over 2022 Ulilities expenses will increase by 0.4% over 2022 2024 Rooms revenues will increase by 5% over 2023 Food and Beverage revenues will increase by 10% over 2023 Other income will decrease by 1.5% over 2023 Salaries, wages and benefits will increase by 0.4% over 2023 Direct operating expenses will increase by 0.3% over 2023 General & Administartive expenses will increase by 0.4% over 2023 Ulilities expenses will increase by 0.5% over 2023 Occupancy costs will increase by 0.7% over 2023 NOTE: For all years assume the that food to beverage revenues mix remains 80% to 20% Round all figures after calculating to the nearest dollar (no cents) and percentages to the nearest 0.1% (i.e. 23.441 = 23.4) Balance Sheet Information Use the Balance Sheet information to calculate the pro forma ratios Calculate the following ratios for the Spartan Hotel's financial analysis (2022 - 2024) Return on Assets Return on Equity Debt ratio Debt to Equity ratio Current ratio Profit margin 2021 Dollars 2022 Dollars 2023 Dollars 2024 Dollars % % % % NAME: Spartan Hotel Pro Forma Income Statement Revenues Rooms Food Beverage Other Total Revenues Cost of sales Gross Profit Expenses Salaries, Wages and Benefits Direct Operating Expenses Marketing Repair and Maintenance General and Administrative expenses Utilities Total Operating Expenses 29.0% 29.0% 29.0% 29.0% 33.0% 6.0%) 4.0% 6.0% 5.0% 5.0% Occupancy Expense Property taxes Insurance Depreciation Interest Total Non-operating Expenses 5.0% 3.0% 1.0% 5.0% 3.0% Total Expenses Total Income (Loss) before Taxes NAME: Spartan Hotel Balance Sheet 31-Dec-21 Dollars 31-Dec-22 Dollars 31-Dec-23 Dollars 31-Dec-24 Dollars ASSETS Current Assets $ 4,662,925 $ 4,662,725 $ 4,570,535 $ 5,720,525 Fixed Assets $ 13,988,165 $ 14,758,165 $ 14,630,065 $ 14,435,125 TOTAL ASSETS $ 18,651,090 $ 19,420,890 $ 19,200,600 $ 20,155,650 LIABILITIES & OWNER'S EQUITY Current Liabilities $ 1,119,255 $ 1,164,055 $ 1,246,035 $ 1,303,340 Long-Term Liabilities $ 6,527,810 $ 7,297,810 $ 7,202,810 $ 7,127,810 Investors' Equity $ 11,004,025 $ 10,959,025 $ 10,751,755 $ 11,724,500 TOTAL LIABILITIES & OWNER'S EQUITY $ 18,651,090 $ 19,420,890 $ 19,200,600 $ 20,155,650 2021 2022 2023 2024 NAME: Spartan Hotel Ratio Analysis (2021-2024) Return on Assets Return on Equity Debt ratio Debt to Equity ratio Current ratio Profit margin HB 358 Individual Assignment #2 NAME: Spartan Hotel Information You have been assigned to prepare and analyze pro forma financial statements for the Spartan Hotel. The Spartan Hotel is a full service 260 room property which is in the process of being purchased by a group of private investors. The property has been fully renovated with the exception of the hotel's restaurant which in the process of construction and will be open in January 2021 at a cost of $780,000. The hotel has historically had an average room rate of $160 per night with an average occupancy rate of 88% annually. The total food and beverage revenues for 2021 are expected to be unchanged at $860,000 for the year. The hotel's food and beverage department has traditionally had an 80% to 20% mix of food beverage revenues. Other income generated mostly from in-room services and is equal to 3% of the hotel's total rooms revenue. Cost of sales percentage will remain constant for the 4 years. After meeting with the investors, management and the controller of the hotel you have been given the following infomation and forecasted figures in order to prepare the 2021-2024 pro forma income statement and the 2021-2024 pro forma balance sheet. Assume all expense percentages remain constant except where increases are noted. Ingnore the fact that 2024 is a leap year. 2022 Rooms revenues will increase by 3.5% over 2021 Food and Beverage revenues will increase by $4400 per day over 2021 Other income will increase by 1.25% over 2021 Salaries, wages and benefits will increase by 0.6% over 2021 Ulilities expenses will increase by 0.4% over 2021 2023 Rooms revenues will increase by 5% over 2022 Food and Beverage revenues will increase by 12% over 2022 Other income will increase by 1.0% over 2022 Salaries, wages and benefits will increase by 0.8% over 2022 Direct operating expenses will increase by 0.4% over 2022 Ulilities expenses will increase by 0.4% over 2022 2024 Rooms revenues will increase by 5% over 2023 Food and Beverage revenues will increase by 10% over 2023 Other income will decrease by 1.5% over 2023 Salaries, wages and benefits will increase by 0.4% over 2023 Direct operating expenses will increase by 0.3% over 2023 General & Administartive expenses will increase by 0.4% over 2023 Ulilities expenses will increase by 0.5% over 2023 Occupancy costs will increase by 0.7% over 2023 NOTE: For all years assume the that food to beverage revenues mix remains 80% to 20% Round all figures after calculating to the nearest dollar (no cents) and percentages to the nearest 0.1% (i.e. 23.441 = 23.4) Balance Sheet Information Use the Balance Sheet information to calculate the pro forma ratios Calculate the following ratios for the Spartan Hotel's financial analysis (2022 - 2024) Return on Assets Return on Equity Debt ratio Debt to Equity ratio Current ratio Profit margin 2021 Dollars 2022 Dollars 2023 Dollars 2024 Dollars % % % % NAME: Spartan Hotel Pro Forma Income Statement Revenues Rooms Food Beverage Other Total Revenues Cost of sales Gross Profit Expenses Salaries, Wages and Benefits Direct Operating Expenses Marketing Repair and Maintenance General and Administrative expenses Utilities Total Operating Expenses 29.0% 29.0% 29.0% 29.0% 33.0% 6.0%) 4.0% 6.0% 5.0% 5.0% Occupancy Expense Property taxes Insurance Depreciation Interest Total Non-operating Expenses 5.0% 3.0% 1.0% 5.0% 3.0% Total Expenses Total Income (Loss) before Taxes NAME: Spartan Hotel Balance Sheet 31-Dec-21 Dollars 31-Dec-22 Dollars 31-Dec-23 Dollars 31-Dec-24 Dollars ASSETS Current Assets $ 4,662,925 $ 4,662,725 $ 4,570,535 $ 5,720,525 Fixed Assets $ 13,988,165 $ 14,758,165 $ 14,630,065 $ 14,435,125 TOTAL ASSETS $ 18,651,090 $ 19,420,890 $ 19,200,600 $ 20,155,650 LIABILITIES & OWNER'S EQUITY Current Liabilities $ 1,119,255 $ 1,164,055 $ 1,246,035 $ 1,303,340 Long-Term Liabilities $ 6,527,810 $ 7,297,810 $ 7,202,810 $ 7,127,810 Investors' Equity $ 11,004,025 $ 10,959,025 $ 10,751,755 $ 11,724,500 TOTAL LIABILITIES & OWNER'S EQUITY $ 18,651,090 $ 19,420,890 $ 19,200,600 $ 20,155,650 2021 2022 2023 2024 NAME: Spartan Hotel Ratio Analysis (2021-2024) Return on Assets Return on Equity Debt ratio Debt to Equity ratio Current ratio Profit margin

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