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<br /> <br /> In this case, even after we remove the depreciation expense the expenditures still exceeded <br /> revenues during the past 4 years. Only 2010 shows a positive result. You’ll notice however that <br />there is no impact on the golf course’s cash reserve or net assets. This is because depreciation <br /> <br />expense is a non-cash expense – i.e. we’re not actually moving any money. <br /> <br />Bottom line is that golf course is running out of cash. Cash reserves have declined from <br />$417,000 in 2010 to $249,000 by the end of 2014. <br /> <br />2015 and Beyond <br />The graph below presents the same 2010-2014 financial summary information accompanied by a <br />projection of the next 3 fiscal years (2015-2017). The 2015 amount is based on the adopted <br />budget. The remaining years are extrapolated from the 2015 budget with the assumption that <br />revenues will increase by 4% and expenditures by only 3%. <br /> <br />Cedarholm Golf Course Financial Summary <br />(Depreciation) <br />Including <br /> $590,000 <br />$417,153 <br />$249,563 <br /> $390,000 <br /> $190,000 <br /> $(10,000) <br />20102011201220132014201520162017 <br />$(3,197) <br />RevenuesExpendituresCash Balance <br /> <br /> <br />As shown here, on its current pace Cedarholm Golf Course will run out of money in 2017. Bear <br />in mind that this only includes the impacts from projected operating expenses. Capital purchases <br />will expedite the draw-down of the golf course’s cash reserves even faster. <br /> <br /> <br />Final Comments <br />Hopefully the information presented above demonstrates that there are significant financial <br />concerns at the golf course that need to be addressed very soon. Reducing the administrative <br />charge might be part of the solution, but its effect will be negligible given the size of the current <br />operating losses. <br /> <br />We could also evaluate whether it is appropriate to allocate 1.75 FTE’s to the golf course in <br />addition to the temporary/seasonal employees. If we did a time-spent profile for golf course <br />employees would we find that they collectively spend 3,640 hours annually managing or serving <br />the golf course? If not, then the hours spent elsewhere should arguably be funded by that <br />department/division. <br /> <br /> 5 <br /> <br />