Heath Richmond
January 30, 2007
Fiscal Management
Rachel Siegel
1) Analyze Kingdom’s Trails revenue structure for fye 9/30/06 and for fye 09/03/05 (show me the numbers).
In Kingdom’s Trails fiscal year ending 9/30/06 they had a total revenue of $177,979.75 and a revenue of $123,785.80 for the previous year. The graph below breaks down the revenue or both years into different categories.
Oct '04 - Sep '05
Oct '05 - Sep '06
CONTRIBUTION (Dues & Donations) Total 105,617.00 151,536.75
Member Dues Total 83,931.00 128,961.00
Whole Sale Dues 9,094.00 15,613.00
Day Pass 32,442.00 51,649.00
Membership Dues 42,395.00 61,699.00
Donation Income 5,205.00 1,795.00
Annual Fund Income 3,245.00 4,483.00
Campaign Income 1,875.00 5,075.00
Fundraising Events 5,619.00 580.00
Restricted Income 5,742.00 10,642.75
PROJECT INCOME Total 11,085.00 11,443.00
Logo Product Sales 11,050.00 11,374.00
Map Sales 35.00 69.00
Service-Contract. 0.00 15,000.00
ADVERTISING SALES Total 7,051.80 0.00
Map Advertising Sales 7,051.80 0.00
Interest Income 32.00 0.00
TOTAL INCOME
123,785.80 177,979.75
As this table shows the majority of Kingdom’s Trails revenue comes from member dues. In fact in Oct '04 - Sep '05 member dues accounted for 68 percent of all revenue and 72 percent in Oct '05 - Sep '06. Within member dues Kingdom’s Trails gathers the most revenue from season pass dues, day pass sales, and whole sale dues respectively. Despite the fact that Kingdom’s Trails receives the majority of its revenue from member dues this is not its only form of revenue. Kingdom’s Trails also gather revenue from other sources including: Donation Income, Annual Fund Income, Campaign Income, Fundraising Events, Restricted Income, Logo Product Sales, Map Sales, Service-Contracts, Map Advertising Sales, and a small amount from Interest Income. Kingdom’s Trails revenue structure can be better visualized in following graphs represent Kingdom’s Trails Revenue sources for fiscal years ending Oct '04 - Sep '05 and Oct '05 - Sep '06.
2) Discuss how KT’s revenue structure has changed; be sure to discuss if it has become more or less diverse.
In Kingdom’s Trails fiscal year ending 9/30/06 they had a total revenue of $177,979.75. This was $54193.95 more than the previous years revenue of $123,785.80. This was a massive increase of 43.8 percent. In order to understand and analyze this huge increase in revenue, it is important to look at Kingdom’s Trails revenue for these two years in more detail. Despite the massive increase in revenue Kingdom’s Trails revenue structure has become less diverse. Below is a side by side comparison of the two years revenues, broken down in two smaller categories.
Oct '04 - Sep '05
Oct '05 - Sep '06 Difference from Oct '05 - Sep '06 to Oct '04 - Sep '05
CONTRIBUTION (Dues & Donations) Total 105,617.00 151,536.75 45,918.25
Member Dues Total 83,931.00 128,961.00 45,030.00
Whole Sale Dues 9,094.00 15,613.00 6,519.00
Day Pass 32,442.00 51,649.00 19,207.00
Membership Dues 42,395.00 61,699.00 19,304.00
Donation Income 5,205.00 1,795.00 3,410.00
Annual Fund Income 3,245.00 4,483.00 1,238.00
Campaign Income 1,875.00 5,075.00 3,200.00
Fundraising Events 5,619.00 580.00 5,039.00
Restricted Income 5,742.00 10,642.75 4,900.75
PROJECT INCOME Total 11,085.00 11,443.00 358.00
Logo Product Sales 11,050.00 11,374.00 324.00
Map Sales 35.00 69.00 34.00
Service-Contract. 0.00 15,000.00 15,000.00
ADVERTISING SALES Total 7,051.80 0.00 7,051.80
Map Advertising Sales 7,051.80 0.00 7,051.80
Interest Income 32.00 0.00 32.00
TOTAL INCOME
123,785.80 177,979.75 54,193.95
By looking at the table we can see what portions of Kingdom’s Trails revenue increased. The biggest factor in the increase in revenue was members dues which increased by $45, 030.00. It also went from only being 68 percent of all revenue to 72 percent. This goes along with a general trend of more revenue but from fewer sources. Kingdom’s Trails made 7,051.80 in Oct '04 - Sep '05 of Advertising sales but failed to utilize Advertising sales to generate revenue in Oct '05 - Sep '06. They also failed to generate any revenue from interest in Oct '05 - Sep '06 which generated a small amount of revenue in Oct '04 - Sep '05. Despite the great increase in revenue they also gathered 3,410.00 in donation income and 5,039.00 from fundraising events. Despite the places that there revenue become less diverse they were able to generate $15,000.00 in Service- Contracts which was not a form of revenue in the previous year.
3) Discuss how Kingdom Trails could increase the diversity of its revenue structure.
Although Kingdom’s Trails increased their total revenue by $54193.95 and 43.8 percent they could earn even more by diversify their revenue structure. This would also allow them to continue operating easier if one of there forms of revenue was eliminated.
Kingdom’s Trails could easily diversify their revenue by using previous forms of revenue that they failed to use in '05 - Sep '06 to Oct '04 - Sep '05. With the great increase in popularity they could easily find sponsors for their maps to help diversify their revenue. Since they made a large profit they could also generate interest off of this surplus capitol.
Kingdom’s Trails could also diversify by gaining income from completely new sources. With Kingdom’s Trails increasing popularity they could easily work out some partnership deals with Burk mountain. They could also make deals with local inns and bed and breakfasts, to include day passes with their price of accommodations. Currently they only offer a basic trail system for people to use. Another way that they could help diversify their revenue would be to offer mountain biking as well as, cross country skiing, and snowshoeing instruction. They could also offer guided tours and nature walks.
Kingdom’s Trails is thriving right now. However, by diversifying there revenue structure they could do even better thus being able to better achieve their mission as well as be prepared for harder or changing times
4) Look at KT’s revenues and variable costs, and explain whether KT prices to cover costs, or if prices are subsidized by additional revenues or resources.
Despite the fact that KT is not for profit organization most of their income comes from the people that are benefiting from it and using it. In Oct '04 - Sep '05 member dues accounted for 68 percent of all revenue and 72 percent in Oct '05 - Sep '06. Even though KT could have priced to only cover about 75 percent in Oct '05 - Sep '06 they priced to recover cost and subsequently had $35,904.17 more in revenue then in expenses. KT has the distinct advantage over other business, in that they have several other revenue sources including: Donation Income, Annual Fund Income, Campaign Income, Fundraising Events, Restricted Income, Logo Product Sales, Map Sales, Service-Contracts, Map Advertising Sales, and Interest Income. Although, this only accounted for a little over 25 percent of their revenue it is very necessary in less successful years when KT does not make as much on member dues.
KT is a very small service based business and therefore most of their costs are variable. In Oct '05 - Sep '06 $79,509.14 was spent on wages. This means that 56 percent of all of KT’s expenses were wages. KT also only has one very small office which keeps the fixed costs low. Do to the fact that KT has such low fixed costs it has no problem dealing with the off-season. However, by branching into snowshoeing and cross-country skiing in the winter KT’s has managed to eliminate much of the off season any ways.
Oct '04 - Sep '05 Oct '05 - Sep '06
Revenue
CONTRIBUTION (Dues & Donations) Total 105,617.00 151,536.75
Member Dues Total 83,931.00 128,961.00
Whole Sale Dues 9,094.00 15,613.00
Day Pass 32,442.00 51,649.00
Membership Dues 42,395.00 61,699.00
Donation Income 5,205.00 1,795.00
Annual Fund Income 3,245.00 4,483.00
Campaign Income 1,875.00 5,075.00
Fundraising Events 5,619.00 580
Restricted Income 5,742.00 10,642.75
PROJECT INCOME Total 11,085.00 11,443.00
Logo Product Sales 11,050.00 11,374.00
Map Sales 35 69
Service-Contract. 0 15,000.00
ADVERTISING SALES Total 7,051.80 0
Map Advertising Sales 7,051.80 0
Interest Income 32 0
TOTAL INCOME 123,785.80 177,979.75
Expenses
Administrative Wages 33,653.75 37,999.96
Trail Wages 9,531.75 18,422.00
Grant Wages 3,970.50 1,446.50
Office Wages 15,527.14 21,640.60
CONTRACT SERVICES Total 6,260.11 2,877.00
Trail Maintenance Service 2,628.89 2,180.00
Administrative Services 505 275
Reimbursable Expense 1,908.22 422
Grant contract services 1,218.00 0
TAXES Total 5,146.36 6,281.04
Employer's Share Soc. Sec 3,408.88 4,541.64
Employer's Share Medicare 797.26 1,062.09
Other Taxes 940.22 603
Fees 0 74.31
INT EXPENSE Total 1,159.97 2,347.96
Merchant Act. Charges 1,156.00 2,318.10
Other Interest Expense 3.97 0
INT EXPENSE - Other 0 29.86
ADVERTISING 268 370
Employee Training 0 480
UTILITIES Total 1,818.64 1,560.34
Telecommunications 718.97 563.46
Telephone 1,099.67 996.88
OFFICE EXPENSES 6,437.62 6,042.90
Postage & Freight out 2,149.85 1,716.74
Office & Computer Supplies 687.77 726.16
Rent 3,600.00 3,600.00
ADMINISTRATIVE EXPENSES Total 4,845.75 5,039.87
Insurance 2,775.00 3,141.00
Professional & Filing Fees 224.8 239.95
Selling & Travel Exp. Paid 748.12 732.86
Dues, Manuals, Publications 236 444
Miscellaneous Expenses 547 200
Meeting Expense 508.95 87.94
KTA Center/Info Expenses 1,542.49 533.31
Total Expenses 122,712.61 142,075.58
Net Income 1,073.19 35,904.17
5) Discuss how its pricing structure fits with KT mission and goals.
KT is a non-profit organization that generates a surplus. This is fine as long as they continue to uphold their mission and goals. KT goal is to encourage recreational use of the Northeast Kingdom that is ecologically sensitive and promotes the natural beauty of the region. Their organizations mission is to provide recreation and education opportunities for local residents and visitors while working to conserve natural resources and create economic stimulation.
Do to the fact that part of KT mission is to provide recreation and education opportunities for local residents and visitors, they allow kids under 7 and adults over 70 free access to the trails in order to provide this recreation. KT charges a $10 day pass rate for adults and $5 for kids 7-16. This allows KT to make enough to keep providing the service for residents and visitors while still making it affordable enough that everyone can participate. KT also offers season passes so that it does not become a finical burden for people who use the trails often. If KT could not generate this revenue from member dues it would compromise their goals and mission. Without the capitol they would not be able to maintain the trails and provide the experience that they are aiming for. If they had to go to local business to get the capitol in the form of donations the be hurting the local bushiness’s they were trying to help though their mission to create economic stimulation.
January 30, 2007
Fiscal Management
Rachel Siegel
1) Analyze Kingdom’s Trails revenue structure for fye 9/30/06 and for fye 09/03/05 (show me the numbers).
In Kingdom’s Trails fiscal year ending 9/30/06 they had a total revenue of $177,979.75 and a revenue of $123,785.80 for the previous year. The graph below breaks down the revenue or both years into different categories.
Oct '04 - Sep '05
Oct '05 - Sep '06
CONTRIBUTION (Dues & Donations) Total 105,617.00 151,536.75
Member Dues Total 83,931.00 128,961.00
Whole Sale Dues 9,094.00 15,613.00
Day Pass 32,442.00 51,649.00
Membership Dues 42,395.00 61,699.00
Donation Income 5,205.00 1,795.00
Annual Fund Income 3,245.00 4,483.00
Campaign Income 1,875.00 5,075.00
Fundraising Events 5,619.00 580.00
Restricted Income 5,742.00 10,642.75
PROJECT INCOME Total 11,085.00 11,443.00
Logo Product Sales 11,050.00 11,374.00
Map Sales 35.00 69.00
Service-Contract. 0.00 15,000.00
ADVERTISING SALES Total 7,051.80 0.00
Map Advertising Sales 7,051.80 0.00
Interest Income 32.00 0.00
TOTAL INCOME
123,785.80 177,979.75
As this table shows the majority of Kingdom’s Trails revenue comes from member dues. In fact in Oct '04 - Sep '05 member dues accounted for 68 percent of all revenue and 72 percent in Oct '05 - Sep '06. Within member dues Kingdom’s Trails gathers the most revenue from season pass dues, day pass sales, and whole sale dues respectively. Despite the fact that Kingdom’s Trails receives the majority of its revenue from member dues this is not its only form of revenue. Kingdom’s Trails also gather revenue from other sources including: Donation Income, Annual Fund Income, Campaign Income, Fundraising Events, Restricted Income, Logo Product Sales, Map Sales, Service-Contracts, Map Advertising Sales, and a small amount from Interest Income. Kingdom’s Trails revenue structure can be better visualized in following graphs represent Kingdom’s Trails Revenue sources for fiscal years ending Oct '04 - Sep '05 and Oct '05 - Sep '06.
2) Discuss how KT’s revenue structure has changed; be sure to discuss if it has become more or less diverse.
In Kingdom’s Trails fiscal year ending 9/30/06 they had a total revenue of $177,979.75. This was $54193.95 more than the previous years revenue of $123,785.80. This was a massive increase of 43.8 percent. In order to understand and analyze this huge increase in revenue, it is important to look at Kingdom’s Trails revenue for these two years in more detail. Despite the massive increase in revenue Kingdom’s Trails revenue structure has become less diverse. Below is a side by side comparison of the two years revenues, broken down in two smaller categories.
Oct '04 - Sep '05
Oct '05 - Sep '06 Difference from Oct '05 - Sep '06 to Oct '04 - Sep '05
CONTRIBUTION (Dues & Donations) Total 105,617.00 151,536.75 45,918.25
Member Dues Total 83,931.00 128,961.00 45,030.00
Whole Sale Dues 9,094.00 15,613.00 6,519.00
Day Pass 32,442.00 51,649.00 19,207.00
Membership Dues 42,395.00 61,699.00 19,304.00
Donation Income 5,205.00 1,795.00 3,410.00
Annual Fund Income 3,245.00 4,483.00 1,238.00
Campaign Income 1,875.00 5,075.00 3,200.00
Fundraising Events 5,619.00 580.00 5,039.00
Restricted Income 5,742.00 10,642.75 4,900.75
PROJECT INCOME Total 11,085.00 11,443.00 358.00
Logo Product Sales 11,050.00 11,374.00 324.00
Map Sales 35.00 69.00 34.00
Service-Contract. 0.00 15,000.00 15,000.00
ADVERTISING SALES Total 7,051.80 0.00 7,051.80
Map Advertising Sales 7,051.80 0.00 7,051.80
Interest Income 32.00 0.00 32.00
TOTAL INCOME
123,785.80 177,979.75 54,193.95
By looking at the table we can see what portions of Kingdom’s Trails revenue increased. The biggest factor in the increase in revenue was members dues which increased by $45, 030.00. It also went from only being 68 percent of all revenue to 72 percent. This goes along with a general trend of more revenue but from fewer sources. Kingdom’s Trails made 7,051.80 in Oct '04 - Sep '05 of Advertising sales but failed to utilize Advertising sales to generate revenue in Oct '05 - Sep '06. They also failed to generate any revenue from interest in Oct '05 - Sep '06 which generated a small amount of revenue in Oct '04 - Sep '05. Despite the great increase in revenue they also gathered 3,410.00 in donation income and 5,039.00 from fundraising events. Despite the places that there revenue become less diverse they were able to generate $15,000.00 in Service- Contracts which was not a form of revenue in the previous year.
3) Discuss how Kingdom Trails could increase the diversity of its revenue structure.
Although Kingdom’s Trails increased their total revenue by $54193.95 and 43.8 percent they could earn even more by diversify their revenue structure. This would also allow them to continue operating easier if one of there forms of revenue was eliminated.
Kingdom’s Trails could easily diversify their revenue by using previous forms of revenue that they failed to use in '05 - Sep '06 to Oct '04 - Sep '05. With the great increase in popularity they could easily find sponsors for their maps to help diversify their revenue. Since they made a large profit they could also generate interest off of this surplus capitol.
Kingdom’s Trails could also diversify by gaining income from completely new sources. With Kingdom’s Trails increasing popularity they could easily work out some partnership deals with Burk mountain. They could also make deals with local inns and bed and breakfasts, to include day passes with their price of accommodations. Currently they only offer a basic trail system for people to use. Another way that they could help diversify their revenue would be to offer mountain biking as well as, cross country skiing, and snowshoeing instruction. They could also offer guided tours and nature walks.
Kingdom’s Trails is thriving right now. However, by diversifying there revenue structure they could do even better thus being able to better achieve their mission as well as be prepared for harder or changing times
4) Look at KT’s revenues and variable costs, and explain whether KT prices to cover costs, or if prices are subsidized by additional revenues or resources.
Despite the fact that KT is not for profit organization most of their income comes from the people that are benefiting from it and using it. In Oct '04 - Sep '05 member dues accounted for 68 percent of all revenue and 72 percent in Oct '05 - Sep '06. Even though KT could have priced to only cover about 75 percent in Oct '05 - Sep '06 they priced to recover cost and subsequently had $35,904.17 more in revenue then in expenses. KT has the distinct advantage over other business, in that they have several other revenue sources including: Donation Income, Annual Fund Income, Campaign Income, Fundraising Events, Restricted Income, Logo Product Sales, Map Sales, Service-Contracts, Map Advertising Sales, and Interest Income. Although, this only accounted for a little over 25 percent of their revenue it is very necessary in less successful years when KT does not make as much on member dues.
KT is a very small service based business and therefore most of their costs are variable. In Oct '05 - Sep '06 $79,509.14 was spent on wages. This means that 56 percent of all of KT’s expenses were wages. KT also only has one very small office which keeps the fixed costs low. Do to the fact that KT has such low fixed costs it has no problem dealing with the off-season. However, by branching into snowshoeing and cross-country skiing in the winter KT’s has managed to eliminate much of the off season any ways.
Oct '04 - Sep '05 Oct '05 - Sep '06
Revenue
CONTRIBUTION (Dues & Donations) Total 105,617.00 151,536.75
Member Dues Total 83,931.00 128,961.00
Whole Sale Dues 9,094.00 15,613.00
Day Pass 32,442.00 51,649.00
Membership Dues 42,395.00 61,699.00
Donation Income 5,205.00 1,795.00
Annual Fund Income 3,245.00 4,483.00
Campaign Income 1,875.00 5,075.00
Fundraising Events 5,619.00 580
Restricted Income 5,742.00 10,642.75
PROJECT INCOME Total 11,085.00 11,443.00
Logo Product Sales 11,050.00 11,374.00
Map Sales 35 69
Service-Contract. 0 15,000.00
ADVERTISING SALES Total 7,051.80 0
Map Advertising Sales 7,051.80 0
Interest Income 32 0
TOTAL INCOME 123,785.80 177,979.75
Expenses
Administrative Wages 33,653.75 37,999.96
Trail Wages 9,531.75 18,422.00
Grant Wages 3,970.50 1,446.50
Office Wages 15,527.14 21,640.60
CONTRACT SERVICES Total 6,260.11 2,877.00
Trail Maintenance Service 2,628.89 2,180.00
Administrative Services 505 275
Reimbursable Expense 1,908.22 422
Grant contract services 1,218.00 0
TAXES Total 5,146.36 6,281.04
Employer's Share Soc. Sec 3,408.88 4,541.64
Employer's Share Medicare 797.26 1,062.09
Other Taxes 940.22 603
Fees 0 74.31
INT EXPENSE Total 1,159.97 2,347.96
Merchant Act. Charges 1,156.00 2,318.10
Other Interest Expense 3.97 0
INT EXPENSE - Other 0 29.86
ADVERTISING 268 370
Employee Training 0 480
UTILITIES Total 1,818.64 1,560.34
Telecommunications 718.97 563.46
Telephone 1,099.67 996.88
OFFICE EXPENSES 6,437.62 6,042.90
Postage & Freight out 2,149.85 1,716.74
Office & Computer Supplies 687.77 726.16
Rent 3,600.00 3,600.00
ADMINISTRATIVE EXPENSES Total 4,845.75 5,039.87
Insurance 2,775.00 3,141.00
Professional & Filing Fees 224.8 239.95
Selling & Travel Exp. Paid 748.12 732.86
Dues, Manuals, Publications 236 444
Miscellaneous Expenses 547 200
Meeting Expense 508.95 87.94
KTA Center/Info Expenses 1,542.49 533.31
Total Expenses 122,712.61 142,075.58
Net Income 1,073.19 35,904.17
5) Discuss how its pricing structure fits with KT mission and goals.
KT is a non-profit organization that generates a surplus. This is fine as long as they continue to uphold their mission and goals. KT goal is to encourage recreational use of the Northeast Kingdom that is ecologically sensitive and promotes the natural beauty of the region. Their organizations mission is to provide recreation and education opportunities for local residents and visitors while working to conserve natural resources and create economic stimulation.
Do to the fact that part of KT mission is to provide recreation and education opportunities for local residents and visitors, they allow kids under 7 and adults over 70 free access to the trails in order to provide this recreation. KT charges a $10 day pass rate for adults and $5 for kids 7-16. This allows KT to make enough to keep providing the service for residents and visitors while still making it affordable enough that everyone can participate. KT also offers season passes so that it does not become a finical burden for people who use the trails often. If KT could not generate this revenue from member dues it would compromise their goals and mission. Without the capitol they would not be able to maintain the trails and provide the experience that they are aiming for. If they had to go to local business to get the capitol in the form of donations the be hurting the local bushiness’s they were trying to help though their mission to create economic stimulation.