Touroperator SunShine 11 Januari2017 It’s not going very well, too little quests!

It’s not going very well, do something! Next period Profit and enough cash! Profit & Loss Account Look at the slides on paper! Revenue €4,800,000 Costs of sales Gross margin Operational costs Staff Depreciation Interest €3,840,000 €960,000 €575,000 €375,000 €60,000 €20,000 Loss -€70,000 Costs of sales: 80% of revenue

We start with a quiz questions about The Balance Sheet The Profit & Loss Account The Cash Budget You only get points with a good answer, but more points with a quick answer.

Play the quiz on your cellphone Go to: www.Kahoot.it Students in class Play the quiz on your cellphone Go to: www.Kahoot.it Fill in the pincode and a nickname And wait for the questions Voor docent Ga naar create.kahoot.it click in het menu op public kahoots zoek: game SunShine Dan: Play - Launch - Start en speel op de telefoon

Game Goal: Calculate the changes in the Financial Statements Second goal: Profit and enough cash for Touroperator SunShine Your decisions don’t effect other teams. As a consequence of the decicions for each team the reality is different. Communicate with teammembers about your decisions!.

You are the manager of Touroperator SunShine. The Balance sheet and Profit & Loss Account at the start are given. What happened: A loan and investment (round 1) ‘Discount’ Promotion (round 2) ‘Pay later’ promotion (round 3) Additional loan or repayments (round 4) Discount for paying the Trade payables (round 5); VAT Who’s the best?

Balance Sheet 1/1/2016 Fixed assets Trade Receivables Cash balance 600,000 50,000 100,000 Equity Long-term Liabilities Short-term Liabilities Trade Payables 350,000 200,000 Total 750,000

Round 1 Balance Sheet (200 punten) Choice: Loan: ? ; Short-term or Long-term Investment: (to pay immediately) a) An App: €50,000 or €75,000 50% fixed assets ; 50% current assets (costs charged to operational costs in round 2) Or b) An Event €100,000 or €125,000 ; 100% current assets Or c) Accommodation: €400,000 or €500,000 ; 100% fixed assets Calculate fixed assets, trade receivables, cash, equity, long-term liabilities, short-term liabilities

€100,000 costs next period ; Current assets Balance Sheet Fixed assets Trade Receivables Cash balance 600,000 50,000 100,000 Equity Long-term Liabilities Short-term Liabilities Trade Payables 350,000 200,000 Total 750,000 +100,000 -100,000 +100,000 100.000 €100,000 costs next period ; Current assets 350,000 600,000 300,000 50,000 100,000 100,000

Round 2 Profit and Loss Account (200 points) Depreciation 10% of fixed assets Interest 5% of long-term loan Interest 10% of short-term loan Repayments of loan: 20% of long-term loan Choice: Yes/No Action Discount: Costs €10,000 ; additional revenue €500,000 (margin 10%) Costs €20,000 ; additional revenue €700,000 Calculate: Revenue, depreciation, interest, profit

Round 2 Profit and Loss Account (200 points) Depending on your decision in round 1 The revenue will be received immediately. The supplier must be paid immediately. Investment (*€1.000) Additional revenue 50 75 100 125 400 500 700 1,100 1,400 1,500 1,000 1,200 6,700,000 Additional Revenue: €1,400,000 Additional Costs of sale: €1,120,000 (80% of revenue) Choice: Yes Action Discount: Costs €10,000 ; additional revenue €500,000 ; margin 10% Additional Revenue: €500,000 Additional Costs of sale: €450,000 (90% of revenu) Additional Fixed costs: €10,000

Depreciation 10% of fixed assets Interest 5% of long-term loan Interest 10% of short-term loan Repayments of loan: 20% of long-term loan Depreciation: 10% of €600,000 = €60,000 Interest: 5% of €300,000 + 10% of €100,000 = €25,000 Repayments of loan: 20% of €300,000 = €60,000 Only in Cash Budget not in Profit and Loss Account! 6,700,000 60,000 25,000 Operational costs: €575,000 + €100,000 (round 1) + €10,000 (round 2) = €685,000 Staff costs don’t change

Revenue €4,800,000 Costs of sales Gross margin Operational costs Staff Depreciation Interest €3,840,000 €960,000 €575,000 €375,000 €60,000 €20,000 Loss -€70,000 €6,700,000 €5,410,000 €1,290,000 €685,000 €375,000 €60,000 €25,000 + €145,000 6,700,000 60,000 25,000 145,000

Round 3 Profit and Loss Account (200 points) Choice: Promotion action: the customers may pay later (in the period after the game) Costs €50,000 ; revenue €600,000 (margin 20%) But if You have chosen for the discount action in round 2, the margin is 10%. The customer pays later, the supplier must be paid immediately. Calculate: Revenue, depreciation, interest and profit

After round 2 Revenue €5,000,000 Costs of sales Gross margin Operational costs Staff Depreciation Interest €4,000,000 €1,000,000 €575,000 €475,000 €20,000 €1,120,000 Profit -€90,000 €6,700,000 €5,410,000 €1,290,000 €685,000 €375,000 €60,000 €25,000 + €145,000 Additional Revenue: €600,000 Additional Costs of sale: €540,000 Additional operating costs: €50,000

After round 3 Revenue €5,000,000 Costs of sales Gross margin Operational costs Staff Depreciation Interest €4,000,000 €1,000,000 €575,000 €475,000 €20,000 €1,120,000 Profit -€90,000 €7,300,000 €5,950,000 €1,350,000 €735,000 €375,000 €60,000 €25,000 + €155,000 7,300,000 60,000 (same) 25,000 (same) 155,000 Additional Revenue: €600,000 Additional Costs of sale: €540,000 Additional operating costs: €50,000 ; additional profit €10,000

Round 4 The Cash Budget (200 points) Review the Profit & Loss Account All mentioned costs are also cash expenditure. But please note the actions of round 2 and round 3! 50% of the Trade Payables must be paid in this period. 80% of the Trade Receivables will be paid. The cash balance at the end of the period must be positive. Decision: Additional loan of the bank? (only in amounts of €10,000) (interest 15% must be paid in round 6 after the game, costs in Profit & Loss Account this round) Additional repayments of the loan? (saving 10% interest immediately in Profit & Loss Account this round) Calculate: Cash balance (at the end of the period) and the profit

100,000 6,700,000 80% of 50,000 = 40,000 360,000 ? ? 5,950,000 735,000 375,000 60,000 + ? 5,000 25,000 50,000 101,000 - 355,000 5,000 Profit after round 3 – interest additional loan (or) + interest additional repayments 155,000 – 54,000 + 0 = 101,000

Round 5 The Cash Budget (200 points) Received VAT from customers: €50,000 Paid VAT to supplier: €40,000 Choice: If You pay the remaining Trade Payables You get a discount of 10% Decision: Additional loan of the bank? (only in amounts of €10,000) (interest 15% must be paid in round 6 after the game, costs in Profit & Loss Account this round) Additional repayments of the loan are not permitted in round 5 Calculate: Cash balance (at the end of the period) and the profit Penalty points if profit or cash are negative

There is a positive reveive of VAT in de Cash Budget (€10,000) The Cash Balance must be positive So, additional loan if needed! The additional Trade Payables only if there is a lot of cash!

round 5 15,000 101,000 5,000 0 (enough cash) 0 (not enough cash) 0 (not enough cash) 10,000 15,000 101,000 15,000 101,000 101,000