Kilgors Hotels (fill green shaded cells) 3-Star

Bed 1 (Single) Bed 2 (Double) Bed 3 (Family) total

Hotel Configuration NOTE
area per room (square metres) 16 20 30
number of rooms 1
first floor - 240 square metre 5 4 2
second floor - 240 square metre 5 4 2
third floor - 240 square metre 5 4 2
number of rooms 15 12 6 33
floor space (square metres) 240 240 180 660
refurbishment costs (capex) ($/room) 40,000 62,000 85,000
planned occupancy rate (%) (open 365 days) 100% 80% 60% 82%
average selling price ($/room/night) 2 180.00 240.00 340.00 230.91

Retail Choices on ground floor 1 or 0 Rent ($ per year)

Café 0 72,000
Restaurant 1 50,000
Laundromat 1 25,000
Travel Agent (Local tours) 0 40,000
Fun Games Parlour 0 60,000
Boutique 1 20,000
Select three retail choices 3 95,000

Profit Plan 3-Star

Income Statement
Accommodation Revenue ($) 985,500 840,960 446,760 2,273,220
Food and Beverage (% of accommodation revenue) 10% 10% 10%
Food and beverage revenue ($) 98,550 84,096 44,676 227,322
Rental Income 41,185 35,145 18,671 95,000
Total sales revenue ($) 1,125,235 960,201 510,107 2,595,542
Cost of Goods Sold
Staff Costs (% of accommodation revenue) 3 16% 16% 16%
Staff costs ($) 157,680 134,554 71,482 363,715
Purchases (% of accommodation revenue) 4 9% 9% 9%
Purchases (toiletries, sheets, towels etc., $) 88,695 75,686 40,208 204,590
Total Cost of Goods Sold ($) 246,375 210,240 111,690 568,305
Gross Profit ($) 878,860 749,961 398,417 2,027,237
Gross Margin (%) 78% 78% 78% 78%
Other operating expenses
Administration Costs ($) 72,727 72,727 54,545 200,000
Marketing (% of accommodation revenue) 5 3% 3% 3%
Marketing Costs ($) 33,757 28,806 15,303 77,866
Utilities - base component 7,200 7,200 5,400
utilities - activity component (% of planned accommodation revenue) 3% 3% 3%
Utilities cost 36,765 32,429 18,803 87,997
Maintenance (% of planned accommodation revenue) 6 6% 6% 6%
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Kilgors Hotels (fill green shaded cells) 3-Star
Bed 1 (Single) Bed 2 (Double) Bed 3 (Family) total
Hotel Configuration NOTE
Maintenance - base component 7,200 7,200 5,400
Maintenance cost 66,330 57,658 32,206 156,193
Depreciation (straight line depreciation) 67,273 76,873 54,455 198,600
Property taxes 7,273 7,273 5,455 20,000
Insurance 21,818 21,818 16,364 60,000
Interest on loan 61,091 71,171 50,018 182,280
Total Operating Expenses 367,034 368,754 247,148 982,936
Operating expenses as % of sales revenue 33% 38% 48% 38%

Net Profit ($) 511,826 381,206 151,269 1,044,301

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Kilgors Hotels (fill green shaded cells) 3-Star
Bed 1 (Single) Bed 2 (Double) Bed 3 (Family) total
Hotel Configuration NOTE
Balance Sheet
Current Assets
Cash 21,676 18,497 9,827 50,000
Receivables 15,404 13,144 6,983 35,531
Inventories (guest room items) 7,285 6,217 3,303 16,804
Total current assets ($'000) 44,365 37,858 20,112 102,335
Non-Current Assets
Property plant and equipment at historical cost 272,727 272,727 204,545 750,000
Refurbishments at historical cost 600,000 744,000 510,000 1,854,000
LESS accummulated depreciation from prior years 0 0 0 0
LESS depreciation this year (67,273) (76,873) (54,455) (198,600)
Intangible assets 43,353 36,994 19,653 100,000
Total Non-Current Assets ($'000) 848,807 976,849 679,744 2,505,400

Total Assets 893,172 1,014,707 699,856 2,607,735

Current Liabilities
Accounts Payable 7,285 6,217 3,303 16,804
Non-current liabilities
Loans 872,727 1,016,727 714,545 2,604,000
Total Liabilities 880,012 1,022,944 717,848 2,620,804

Free Cash Flow (FCF) Calc

Net Profit ($) 511,826 381,206 151,269 1,044,301
LESS working capital this year (37,080) (31,642) (16,810) (85,531)
ADD working capital last year 37,080 31,642 16,810 85,531
FCF (NP - Change in Working Capital*) 511,826 381,206 151,269 1,044,301

Key Performance Indicators

Return on Capital Employed (ROCE) 57.78% 37.80% 21.72% 40.31%
Net Profit Margin 45.49% 39.70% 29.65% 40.23%
EBIT ($) 572,917 452,377 201,287 1,226,581
Residual Income (RI) ($) 440,372 300,030 95,280 835,682
EVA ($) 234,254 125,656 8,370 368,280

Income tax rate 30%

Required Rate of Return 8%
WACC 14%

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