Hurrican Island Outward Bound Individual Case Analysis Outline

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MKT 370 Spring 2011
Hurricane Island Outward Bound Individual Case Analysis Outline Note: When "bullet point" is specified you will typically provide one or two sentences per bullet point. Be sure to describe your responses quantitatively as well as qualitatively. What are the problems facing Philip Chin and the Hurricane Island Outward Bound? (two to three bullet points) (5 points) Phillip Chin and the Hurricane Island Outward Bound School are trying to find a balance between increasing revenue and staying in line with their mission and goals. They must find the ideal mix of course offerings and marketing efforts while maintaining school leadership. * In addition to finding the perfect marketing mix, Philip Chin and HIOB also need to focus on building off-season business. Evaluate the Statement of Activity for 1982-1985 from Exhibit 1 and answer each of the following. Provide quantitative analysis to support for your answers. (one bullet point per question) (20 points) What is the prior year to current year percentage change in total support and revenue? (4954-4519)=435 435/4519= .0962 .0962*100= 9.62% increase in total support and revenue *

Which category of revenue has contributed most to the overall growth in revenue over the past four years? Tuition has contributed more to the overall growth in revenue. In particular, special programs have seen the largest increase with a 164.74% increase over the past 4 years. Special programs grew the fastest, but public courses produced the most revenue. *

Which category of program, Public Courses or Special Programs, delivers the greatest gross margin dollars? Public courses produce the greatest gross margin in dollars. *
What is the prior year to current year percentage change in cost of sales, how does this compare to the prior year to current year percentage increase in revenue? The percentage increase in the cost of sales is 5.79% from 1984 to 1985. 2395-2264= 131 131/2264= .058 .058*100= 5.79% increase in cost of sales. There was a 9.62% increase in revenue and a 5.79% increase in cost of sales. This is a good situation because revenue increased 3.83% faster than the cost of sales, meaning the school produced a larger profit as time passed. The actual answer is 13%, I used the wrong set of numbers. *

What is the prior year to current year percentage change in operating expenses? There was a 7.21% decrease in operating expenses from 1984-1985. 1583-1706= -123 -123/1706= -.072 -.072*100= -7.21% Decrease – Our expenses are declining, this is a good thing because we are increasing revenue. But the problem here is that the bulk of the decrease is our decrease in student aid and this is decreasing social profits. *

What has been the trend in marketing expense as a percentage of sales over the past four years? Over the past 4 years, marketing expense as a percentage of sales has decreased from 17.64% in 1982 to 9.03% in 1985, with the lowest percentage occurring in 1984 at 7.76%. To be more specific, the percentage decreased from 17.64% in 1982, to 12.115% in 1983, to 7.76% in 1984, and then increased to 9.03% in 1985. *

Which category of operating expense (not counting depreciation) has grown the fastest in the past year? Administration expense has grown the fastest at 9.08%, with marketing expense coming in second place at a growth rate of 8.87%. Development, student aid, and other have all decreased in the past year. *

How does the growth in cost of sales compare to the growth in operating expense and what are the implications? There was a 5.79% increase in cost of sales and a 7.21% decrease in operating expense. This means that total expenses have decreased by 1.42%. The increase in the cost of sales has allowed us to decrease operating expenses and still have an overall decrease in expenses, which will lead to a higher profit. *

Which has grown faster, total support and revenue or total expenses, and why? Total...
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