Final Project Rose Hill Stables Jordan Criss

Business Plan

30 Mortgage Plan Principal & Interest $2,885 Property tax + $338 Bought for $775,000 with 20% down ($150,000) 30 year fixed mortgage plan with 3.790% interest rate Principal & Interest $2,885 Property tax + $338 Home Insurance + $242 = $3,465/ month

Business Rates (Sole Proprietorship) Lessons offered 7 days a week 8am-6pm for $35 group, $45 private SWVHJA Shows offered once to twice a month (as schedule allows) to students with school horses or their own horses -hauling available Full stall board $500/mo. -includes twice a day feeding, stall cleaning, hay check, water check, turn out, blanketing, de-worming services, treatment of minor wounds with owner notification of any wounds Partial stall board $300/mo. -essentially a stall rent, includes hay check, water check, owner notification of any wounds feeding and turn out is owner’s responsibility Pasture board $200/mo., owner notification of any wounds Working student opportunities available

Staff Starting with 1 full time worker started at $10 an hour -cleaning stalls, feeding, turning out, blanketing, watering, checking hay, general barn cleaning A barn manager will be hired as I acquire more horses, to be payed on an annual salary of $30k -managing of feed schedule, manage injuries and vaccination, turn out schedule, state of facilities, purchasing feed/hay, managing of workers and payroll/scheduling Working student in exchange for lessons or board -teaching of lessons to appropriate experience levels, stall cleaning, feeding, turning out, watering, checking hay, general barn cleaning

Starting Horses On free lease from Johnny Atkinson from Marion, SC -Ellie, 7 yo 16.2hh warmblood mare, advanced riders -Red, 6 yo 16hh warmblood gelding, intermediate to advanced riders -Twitter, 6 yo 14.1hh welsh gelding, beginner to intermediate riders -Dixie, 20 yo 14.3hh welsh mare, beginner riders -Brandy, 12 yo 14hh welsh mare, beginner riders -Daisy, 15 yo 12.1hh welsh mare, beginner to intermediate riders

Property Description

The Property 19290 Vontay Road Maidens, VA 23102 3,126 sqft house with 4 beds 2 ½ baths 14 stall barn with matted stalls, large tack room with 14 tack boxes/lockers, two wash cross ties, feed room, bathroom, and storage 120’x72’ lighted covered arena 210’x115’lighted ourdoor arena 5 pastures, 4 paddocks, all 3 board fencing Hay shed

Location Demographics Population: 2,839 Average household value: $287,800 Average income per household: $93,221 Elementary School: South Anna Middle School: Liberty High School: Patrick Henry Richmond is the largest city in the area -Population: 54,751 -Average household value: $147,000 -Average income per household: $36,855

Cash Flow Statement

Balance Sheet

Balance Sheet Analysis

Total Current Assets (186,108.06) minus Total Current Liabilities (20,010.75) = 166,097.31 Net Worth Therefore, Rose Hill Stables is solvent. Equity

Solvency: Debt to Asset Ratio Total Liabilities (721,478.75) divided by Total Assets (288,321.06) = 2.5023 Therefore, according to this ratio, Rose Hill Stables is insolvent. Because I bought such a large property, the long-term mortgage (under non-current liabilities) is bringing the ratio up. The business is solvent in the equity calculation because the large amount of mortgage to be payed over the next 29 years is not included in the calculation. Just because Rose Hill Stables is insolvent in this equation does not mean it cannot pay its bills for this fiscal year. Solvency: Debt to Asset Ratio

Solvency: Equity to Asset Ratio Total Equity (166,097.31) divided by Total Assets (288,321.06) = 0.5761 Therefore, about approximately 58% of Rose Hill Stable’s assets are owned. Solvency: Equity to Asset Ratio

Solvency: Debt to Equity Ratio Total Liabilities (721,478.75) divided by Owners Equity (166,097.31) = 4.344 Therefore, Rose Hill Stables is approaching insolvency. Again, the ratio is skewed because the mortgage is to be payed over the next 29 years, not the next fiscal year. Solvency: Debt to Equity Ratio

Liquidity: Current Ratio Total Current Assets (186,108.30) divided by Total Current Liabilities (20,010.75) = 9.301 Therefore, Rose Hill Stables has high residual current asset value. Liquidity: Current Ratio

Liquidity: Working Capital Current Assets (186,108.30) minus Current Liabilities (20,010.75) = 166,097.31 Therefore, Rose Hill Stables is liquid. Liquidity: Working Capital

Income Statement

Conclusion

Looking forward, Rose Hill Stables could be a very profitable business if managed properly, maintains loyal clients, and expands. The business could go one of two ways; expanding or maintaining a small operation. Expanding would mean investing in more horses and therefore hiring at least one other full time worker and possibly a barn manager. That would also mean purchasing employee health insurance. Maintaining the small business would be doable, but paying off the $775,000 mortgage would most likely take more than 30 years based on the debt to equity ratio of 4.4931 and Rose Hill Stables tendency towards insolvency. “Rose Hill Stables” is fairly reasonable and realistic business proposal if I had enough money to purchase that property.