which results in low operating costs and overall expenses.
Because it is seasonal service orientated, there is very little capital required to start such a business. Our first summer of operation will be in 2005, however, we will begin advertising during the fall of 2004. This will allow a sufficient amount of time for parents to research our camp and to utilize our early registration discount prices. Open registration will begin in January and will close the first week of May. In order to secure a place in our camp, parents will be required to pay entire summer fees during the initial registration process. As a result of such a measure, we as a camp will begin to build an early source of income starting in January.
Opening Balance SheetIn the Balance Sheet, there are many different equations and formulas created to provide a starting point from which to measure future changes regarding assets and liabilities. In the following financial analysis, we will justify our financial decisions. All financial statements are listed as tables or figures after the financial summaries. A complete Business Budget is listed in Appendix E. All financial ratios are listed in Appendix F.
1.)Prepaid Expenses in Current Assets- This includes all items in the Licenses Account ($725.00), the Insurance Account ($3,850.00), the Rent account ($2,250.00), and postage ($148.00).
2.)Cash and Accounts Receivable in Current Assets- the sum for Cash was found by multiplying the total operating revenue ($56,700) by 25%, which equals the $42,525 in cash. This leaves the remaining $14,175 as credit, which belongs in Accounts Receivable.
3.)Inventory in Current Assets- As a result of being in the service industry we did not have any items/goods to sell.
4.)Land in Fixed Assets- We...