Be Our Guest

2226 Words Jun 8th, 2012 9 Pages
Be Our Guest, Inc.

Be Our Guest is a growing firm specializing in providing high-end equipment and services to catering firms. The company is considering its financial needs and appropriate capital structure to ensure available funding for growth and flexibility as well as to meet the day-to-day needs of its highly seasonal business. This paper attempts to analyze the key success factors of the firm and assess the appropriate funding levels from both the company?s perspective as well as that of the bank.

1. What are the key success factors for Be Our Guest?

The core benefit Be Our Guest provides is high-end equipment outsourcing and logistical support. The company differentiates itself based on the quality of its service and a
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1994 1995 1996 1997 1998

Total Revenue 1,776,348 1,973,980 2,159,812 2,650,041 3,000,000
Cost of Revenue:
Salaries 490,968 575,253 547,611 610,602 691,237
As % of Revenue 27.6% 29.1% 25.4% 23.0% 23.0%
Other Cost of Revenue 211,468 302,877 347,094 419,050 480,000
Other Cost /Total Revenue 11.9% 15.3% 16.1% 15.8% 16.0%
Depreciation 116,119 127,906 128,299 148,707 195,000
Depreciation/PP&E 28% 25% 25% 25% 818,555 1,006,036 1,023,004 1,178,359 1,366,237
Gross Profit 957,793 967,944 1,136,808 1,471,682 1,633,763
Gross Margin 53.92% 49.04% 52.63% 55.53% 54.46%
Operating Expenses:
Depreciation 3,692 8,322 14,025 22,612 22,612
General and Admin. Salaries 381,501 434,434 539,168 840,718 960,000
As % of Revenue 21.48% 22.01% 24.96% 31.72% 32.00%
Other General & Admin Exp. 402,423 384,863 420,683 500,384 600,000
Other G&A/Rev 23% 19% 19% 19% 20%
Bad Debt Expense 5,702 977 22,186 5,188 6,000 789,626 820,274 982,037 1,346,290 1,566,000
Earnings from Operations 168,167 147,670 154,771 125,392 67,763
Interest, Net (27,820) (33,912) (44,545) (37,580) (37,580)
Net Earnings 140,347 113,758 110,226 87,812 30,183
Distributions to Shareholders (60,000) (46,700) (95,000)

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