Sport Finance Snow Basin Ski Area Case Study Analysis
Snow Basin Case Study: Snow Basin is a ski area located in Provo, UT which is considering expanding its ski lift capacity. After reading and studying the case study, students will write a detailed paper that answers the following questions.
1) What aspects of Snow Basin would you give high marks?
2) What aspects of Snow Basin cause concerns?
3) Give your financial analysis, should Snow Basin attempt to expand its ski lift capacity?
4) What types of changes could be made to Snow Basin's operations that might enhance revenue generation?
Additionally, the paper should include a ratio table which includes the following ratios:
- current ratio
- cash as a % of TCA
- accounts receivable as a % of TCA
- inventory as a % of TCA
- average collection period
- debt ratio
- gross profit margin
- return on investment
- net profit margin
- quick ratio
*gross profit margin = total operating profit/gross income
*return on investment = net income/ total assets (the very bottom number on the asset part of the balance sheet)
Here is some additional information that you might find useful:
What does it mean for the lodge and ski shop to be under lease to a concessionaire? This means that the company has hired another company to run those areas. This is important information and should be looked at very closely.
Nonprofit concerns: Yes, Snow Basin is a non-profit. This, however, does not mean that they can't make money. What it means is that the money is not then going back to share holders as profit. A non-profit's mission is about providing services to the community rather than making money for an owner or share holders. A non-profit is allowed to make money and then figure out the best way to use that money to fund their operation and/or provide more/better services for the community. While it is important to keep the fact that Snow Basin is a non-profit in the back of your mind, this doesn't change what the numbers, ratios, and reports say. Use that information to determine what is good and bad and to build your case for or against expanding.
Attachment:- Case Study.rar