In: Accounting
The following information is from Bluff Run Golf Courses. The company runs three courses and the July income statement for each course is as follows:
BLUFF RUN GOLF COURSES | ||||||
Income Statement | ||||||
Month Ending July 31, 2018 | ||||||
Blue Course | Black Course | Gold Course | ||||
Revenues | ||||||
Greens fees revenue | $62,500 | $89,000 | $42,900 | |||
Outings revenue | ? | 6,000 | 29,000 | |||
Total revenue | $73,100 | $95,000 | $71,900 | |||
Expenses | ||||||
Landscaping | $7,800 | $14,200 | $6,500 | |||
Wages | 43,900 | ? | 32,600 | |||
Repairs and maintenance | 5,600 | 2,600 | 4,500 | |||
Fuel | 3,100 | 3,000 | 1,990 | |||
Utilities | 1,800 | 3,000 | 1,650 | |||
Total expenses | $62,200 | $78,100 | $47,240 | |||
Operating income | $10,900 | $16,900 | ? |
A. Calculate the operating income percentage for each of the courses. Round your percentages to one decimal place.
Course Blue | |
Course Black | |
Course Gold |
B.
1. Perform a vertical analysis for each course. Round your percentages to one decimal place.
Bluff Run Golf Courses Income Statement |
||||||
Month Ending July 31, 2018 | ||||||
Course Blue | Course Black | Course Gold | ||||
Revenues | ||||||
Greens fees revenue | $62,500 | $89,000 | $42,900 | |||
Outings revenue | 6,000 | 29,000 | ||||
Total revenue | $73,100 | $95,000 | $71,900 | |||
Expenses | ||||||
Landscaping | $7,800 | $14,200 | $6,500 | |||
Wages | 43,900 | 32,600 | ||||
Repairs and maintenance | 5,600 | 2,600 | 4,500 | |||
Fuel | 3,100 | 3,000 | 1,990 | |||
Utilities | 1,800 | 3,000 | 1,650 | |||
Total expenses | $62200 | $78100 | $47240 | |||
Operating income | $10,900 | $16,900 | ||||
Operating income % |
2. Based on a vertical analysis of each course, which accounts would you want to investigate further?
C. Which method of analysis (using a dollar value or percentage) is most relevant and/or useful? Why?
Operating Income | |||
blue | Black | Gold | |
Tototal Revenue (a) | $73,100.00 | $95,000.00 | 71900 |
Less: Tototal Expense (b) | $62,200.00 | $78,100.00 | 47240 |
Operating Income /(Loss) (c=a-b) | $10,900.00 | $16,900.00 | $24,660.00 |
% of Operating Income (c/a) | 14.9% | 17.8% | 34.3% |
Vertical analysi | ||||||
blue | Black | Gold | ||||
$ | % | $ | % | $ | % | |
Revenue | ||||||
Green Fees Revenue | $62,500.00 | 85.5% | $89,000.00 | 93.68% | $42,900.00 | 59.67% |
Outting Revenue | $10,600.00 | 14.5% | $6,000.00 | 6.32% | $29,000.00 | 40.33% |
Tototal Revenue | $73,100.00 | 100.0% | $95,000.00 | 100.00% | $71,900.00 | 100.00% |
Expenses | ||||||
Landscaping | $7,800.00 | 12.5% | $14,200.00 | 18.2% | $6,500.00 | 13.76% |
Wages | $43,900.00 | 70.6% | $55,300.00 | 70.8% | $32,600.00 | 69.01% |
Repaid & Maintainance | $5,600.00 | 9.0% | $2,600.00 | 3.3% | $4,500.00 | 9.53% |
Fuel | $3,100.00 | 5.0% | $3,000.00 | 3.8% | $1,990.00 | 4.21% |
Utilities | $1,800.00 | 2.9% | $3,000.00 | 3.8% | $1,650.00 | 3.49% |
Tototal Expense | $62,200.00 | 100.0% | $78,100.00 | 100.0% | $47,240.00 | 100.00% |
Operating ncome | $10,900.00 | 14.9% | $16,900.00 | 17.8% | $24,660.00 | 34.3% |
Gold Should be investigate further .
Percentage method of analysis of most relevant becasue it's easier way to make analyis as per pas trend and with its peers group