BSBFIM501 Manage Budgets & Financials Plans

Running head: MANAGE BUDGETS AND FINANCIAL PLANS
Manage Budgets and Financial Plans
Name of the Student:
Name of the University:
Author Note:

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MANAGE BUDGETS AND FINANCIAL PLANSExecutive Summary
The tourism industry in Australia had undergone rapid growth over several past decades. The
current trend shows that there is an increase in the number of tourists who enter the country and
provides an opportunity for Australian tours for penetrating in the market. The services of
Adventure Travel and Tours Limited will be positioned very carefully where the company will
deal with providing extremely high quality as well as comfortable experience to the clients so
that they have greater appreciation in the natural environment. In an nutshell, Adventure Travel
and Tours Limited do not just intend to market or sell the service but also to sell travel solutions
and provide a total quality environment to their valued customers that will help in establishing
reputable corporate image.

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MANAGE BUDGETS AND FINANCIAL PLANS
Table of Contents
Introduction to Business investors or stakeholders.........................................................................3
Vision Statement of Adventure Travel and Tours Limited.........................................................3
Mission Statement of Adventure Travel and Tours Limited.......................................................3
Goal of Adventure Travel and Tours Limited.............................................................................3
Objectives of Adventure Travel and Tours Limited....................................................................3
Financial Plan..................................................................................................................................5
Basic Assumptions.......................................................................................................................5
Start-up Cost................................................................................................................................6
Depreciation and Amortization Schedule....................................................................................7
Projected Room Bookings...........................................................................................................8
Projected Sales Revenue............................................................................................................10
Projected Expenses....................................................................................................................11
Projected Income Statement......................................................................................................13
Projected Balance Sheet............................................................................................................15
Projected Cash Flow Statement.................................................................................................17
Break-even Analysis..................................................................................................................22
Capital Budgeting Analysis.......................................................................................................25
Projected Ratio Analysis............................................................................................................26
Reference List................................................................................................................................27

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MANAGE BUDGETS AND FINANCIAL PLANS
Introduction to Business investors or stakeholders
Vision Statement of Adventure Travel and Tours Limited
The vision statement of Adventure Travel and Tours Limited is to become one of the
well-known tourist resorts in Australia in the eyes of community, people and customer. The start-
up tourist resort expects and demands the best that they desire to offer by keeping the service on
top of the choice of valued local visitors and tourists (Renz 2016).
Mission Statement of Adventure Travel and Tours Limited
The mission statement of Adventure Travel and Tours Limited is to offer superior
hospitality experience and enhance guest’s maximum satisfaction. In addition, the start-up tourist
resort believes in creation of positive work environment for attainment of results to satisfy
guests, investors and employees. Adventure Travel and Tours Limited aims at satisfying the
tourist and local visitors who actually travel for relaxation (Petty et al. 2015).
Goal of Adventure Travel and Tours Limited
The goal of Adventure Travel and Tours Limited is to satisfy the need of valued
customers and guests by conducting market research.
Objectives of Adventure Travel and Tours Limited
 To exceed in the customer expectations where the start-up company will provide access
to luxury services to the valued customers in terms of tours, travels and resort
 To maintain 90% occupancy rate at the time of peak periods
 To hire experienced and hardworking staff members

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MANAGE BUDGETS AND FINANCIAL PLANS
Financial Plan
Basic Assumptions
BASIC ASSUMPTIONS:
Type of Business: Company
Nature of Project: Tours and Travels
Capital Structure:
Equity 50%
Non-Current Debts 50%
Types of Debts:
5 yr. Bonds at Par 0%
5 years Loan from Bank 100%
Required Rate of Return on
Equity 10.00%
Interest Rate on Loan:
Bonds 0.00%
Loan from Bank 8.50%
Tax Rate 30%
Inflation Rate 0.00%
Mode of Sales:
Cash 100%
Credit 0%
Cash Collection Period 30 days
Mode of Purchase:
Cash 50%
Credit 50%
Cash Payment Period 60 days
Wages & Salary Payment
15th day on the following
month
Electricity, Telephone &
Internet payment
7th day on the following
month
Other Operating Payments Last day of the month
Insurance & Membership
Fees 6 months' Advance
Depreciation Method:
Building & Improvement Straight Line Method
Furniture & Fittings
10% - Reducing Balance
Method

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MANAGE BUDGETS AND FINANCIAL PLANSComputer, Electrical Equipment
& Other Accessories
30% - Reducing Balance
Method
Kitchen Appliances, Cutleries &
Cookeries
40% - Reducing Balance
Method
Motor Vehicle Straight Line Method
Explanation
 Motor vehicle and building & improvement will be depreciated by using straight-line method
 Computer, Electrical Equipment, Kitchen appliances, and furniture & Fittings will be depreciated by using reducing
balance method
 Mode of payment will be 50% of cash and 50% on credit
 Loan from bank will taken at 8.50% (Madura 2014)
Start-up Cost
Particulars Amount
Residual
Value
Non-Current Assets:
Land $2,500,000 $0
Building & Improvement $5,000,000 $1,500,000
Furniture & Fittings $1,500,000 $450,000
Computer, Electrical
Equipment & Other
Accessories $3,000,000 $0
Kitchen Appliances, Cutleries
& Cookeries $1,250,000 $0
Motor Vehicle $1,000,000 $300,000
Preliminary Expenses:
Land Registration $65,000
Business Registration $125,000
License Fees $50,000
Deposit for Electricity $72,000 $72,000
Deposit for Telephone &
Internet $35,000 $35,000