Model Inputs

Product Type Programs Food Merchandise

Cost of Goods Sold (COGS) 40% 60% 70%
Commission 20% 10% 5%
Fixed Costs $5,000.00 $10,000.00 $20,000.00
Employees (% of Expected Profit) 0.05% 0.20% 0.03%
Salary (per employee) $50.00
Arena Fee $100,000.00

Event Profitability Analysis

Gross Profit
Product Type Programs Food Merchandise
Sales $90,401.00 $185,427.07 $486,488.13
Cost of Goods Sold (COGS) $36,160.40 $111,256.24 $340,541.69
Gross Profit $54,240.60 $74,170.83 $145,946.44

Operating Expenses
Product Type Programs Food Merchandise
Salary Expenses $800.00 $4,150.00 $1,550.00
Commissions $18,080.20 $18,542.71 $24,324.41
Fixed Costs $5,000.00 $10,000.00 $20,000.00
Total Operating Expenses $23,880.20 $32,692.71 $45,874.41

Profit before Arena Fee $30,360.40 $41,478.12 $100,072.03

Number of Employees 16 83 31

Profit Summary
Product Type Total
Sales $762,316.20
Gross Profit $274,357.87
Total Operating Expenses $102,447.31
Profit before Arena Fee $171,910.55
Arena Fee $100,000.00
Net Profit $71,910.55
 Input Analysis
# of Events 100

Statistic Attendance Programs Food Merchandise

Average 14965.76 72471.76 154242.26 393360.47
Standard Deviation 3994.23 42687.13 66229.45 227919.37
95% Confidence Interval $8,366.52 $12,980.73 $44,671.38

Product Type Programs Food Merchandise

Correlation with Attendance 0.55 0.62 0.54

Attendance 18000

Product Type Programs Food Merchandise

Sales Forecast $90,401.00 $185,427.07 $486,488.13
Upper Limit for Sales $98,767.53 $198,407.81 $531,159.50
Lower Limit for Sales $82,034.48 $172,446.34 $441,816.75

What-if Analysis
Attendance Forecast
$71,910.55 15000 18000 21000
$50,000.00
$75,000.00
Arena Fee

$100,000.00
$125,000.00
$150,000.00
$175,000.00
$200,000.00

Questions
Question 1: The sales for which product type are most highly correlated with Food
attendance?

Question 2: How likely is it that food sales would exceed $220,000 if attendance is < 5% chance
18000?

Question 3: Which product generates the largest gross profit? Merchandise

Question 4: Which product will require the fewest employees? Programs

Question 5: Would the event be profitable with a 150,000 arena fee if 15000 people No
were in attendance?
You are the owner of a small business that manages the program, food, and
merchandise sales at the Excel Center, where the local professional
basketball team plays. In addition to basketball games, the Excel Center
hosts dozens of events a year. Your company handles all sales made inside
the arena. There are three major products you sell: programs, food, and
merchandise. You have decided to build a spreadsheet model to help you
analyze and project the profitability of future events. The “Event Profit”
worksheet contains this model. You have randomly selected sales and
attendance data from a number of past events to help build your model.
This data can be found on the “Past Events” worksheet. You will analyze this
data in order to obtain appropriate values to develop the model. Complete
the tasks to finish the model. Whenever possible, reference cells rather
than hard-coding values in the cells of your worksheet.