1. Complete the Operating Budget for Water World (Appendix A):

The pool supply line is correctly calculated based on chlorine kit usage.

The operating budget is properly completed from the source data contained in Appendix A.

2. Prepare a Cash Budget for Water World (Appendix A):

The number of chlorine kits purchased per month is correctly calculated and used to complete the pool supply line based on cash flows when preparing the cash budget.

The cash budget for the months of May through October Water World is prepared in good form and clearly shows the individual and total cash in-flows and out-flows. Required borrowing and repayments and interest charges are accurately calculated and included in the correct month.

3. Ratio Analysis (Appendix B):

Ratios are calculated based on the financial statements and industry averages provided by Water World for all years and profitability ratios include the 2019 projections. The ratio trends are properly indicated.

4. Financial Analysis Report:

The report begins with an introduction that concisely informs the reader of the reports purpose and the content that will follow.

Each financial analysis concept, horizontal analyses, vertical analysis and ratio analyses (liquidity, solvency, profitability), is included in a separate section and is fully yet concisely explained using non-technical language that allows the reader to fully understand the concept. Within each section, each ratio and analysis is explained and compared to industry (if applicable) and an interpretation of the results is provided, including probable causes based on the case facts. Each section includes a brief conclusion and may include a recommendation. The commentary in each section provides information that is useful to Water World; not just a description of the ratio formula or how it was calculated.

Liquidity

Solvency

Profitability

Horizontal & Vertical Analyses

The report ends with a conclusion and overall recommendation that aligns with __Companies___ requested information. The conclusion flows logically from the report sections and does not introduce any new information or raise any new questions.

Ltd. operates a waterslide park outside of a major Canadian city. The owner, your uncle, is in a bind since his brother, who usually prepares the operating and cash budgets, hus unexpectedly left the company. Your mother, has recommended you to help since you are taking an accounting course and will have valuable skills that can help the family out. Your uncle has provided the following information: The water park is open from May through September and 60% of its sales are paid in cash, 30% are paid by credit card and 10% are school groups that are billed to the school divisions. Credit card companies deposit payment to Water World's corporate bank account the same day less a 1% processing fee. Admission fees billed to school groups are paid the following month. All expenses are paid the month they are incurred. The following projections have been completed to date (this table is also available in Excel Appendix A): 2021 Operating Year Projections May June July August September Sales s 160,000 $ 210,000 $ 300,000 $ 300,000 $ 250,000 Staff costs $ (43,200) S (56,700) $ (81.000) (81,000) $ (67,500) Operating Expenses $ (54,400) $ (71.400) $ (102,000) $ (102,000) $ (85,000) Depreciation expense (13,000) $ (13,000) $ (13,000) $ (13,000) $ (13,000) Pool supplies expense Expected attendance 6,880 9,030 12,900 12,900 10,750 The pool supply expense line is incomplete. Your uncle tells you that the park uses balanced chlorine kits to maintain the pools and slides at a cost of $250 per kit and the number needed is based on anticipated usage. He expects to use 10 in May, 20 in June, 40 in July, 40 in August and 20 in September but always wants to have 10% of next month's requirements on hand "just in case". There are 10 kits currently in inventory and he would like to have at least 5 kits at the end of the year. In addition, repairs are required to the slides in May at an estimated total cost of $125,000 (assume that this is classified as an expense). He also needs to pay $50,000 per operating month on the long-term, non- increst bearing loan (held by the previous owners - his parents who sold the business to him when they retired) and wants to pay a dividend in the amount of $25,000 cach operating month, which he receives in licu of a salary. , has a $500,000 line of credit that can be drawn on for short-term financing. The line of credit balance is currently at zero and 5% annual interest is paid the following month on the outstanding bulunce at the end of the month; any excess cash is immediately used to pay down the line of credit. The cash balance is currently $40,000. Your uncle is also curious about horizontal analysis, vertical analysis and financial ratios and has provided a set of comparative financial statements and industry comparison numbers (Excel Appendix B). He would like you to analyze and explain the concepts of liquidity, solvency and profitability in a short report that includes your conclusions and any recommendations for improvement, please also include the current-year projections in the profitability ratio calculations. He is particularly interested if there is a way to generate more cash from the business Ltd. operates a waterslide park outside of a major Canadian city. The owner, your uncle, is in a bind since his brother, who usually prepares the operating and cash budgets, hus unexpectedly left the company. Your mother, has recommended you to help since you are taking an accounting course and will have valuable skills that can help the family out. Your uncle has provided the following information: The water park is open from May through September and 60% of its sales are paid in cash, 30% are paid by credit card and 10% are school groups that are billed to the school divisions. Credit card companies deposit payment to Water World's corporate bank account the same day less a 1% processing fee. Admission fees billed to school groups are paid the following month. All expenses are paid the month they are incurred. The following projections have been completed to date (this table is also available in Excel Appendix A): 2021 Operating Year Projections May June July August September Sales s 160,000 $ 210,000 $ 300,000 $ 300,000 $ 250,000 Staff costs $ (43,200) S (56,700) $ (81.000) (81,000) $ (67,500) Operating Expenses $ (54,400) $ (71.400) $ (102,000) $ (102,000) $ (85,000) Depreciation expense (13,000) $ (13,000) $ (13,000) $ (13,000) $ (13,000) Pool supplies expense Expected attendance 6,880 9,030 12,900 12,900 10,750 The pool supply expense line is incomplete. Your uncle tells you that the park uses balanced chlorine kits to maintain the pools and slides at a cost of $250 per kit and the number needed is based on anticipated usage. He expects to use 10 in May, 20 in June, 40 in July, 40 in August and 20 in September but always wants to have 10% of next month's requirements on hand "just in case". There are 10 kits currently in inventory and he would like to have at least 5 kits at the end of the year. In addition, repairs are required to the slides in May at an estimated total cost of $125,000 (assume that this is classified as an expense). He also needs to pay $50,000 per operating month on the long-term, non- increst bearing loan (held by the previous owners - his parents who sold the business to him when they retired) and wants to pay a dividend in the amount of $25,000 cach operating month, which he receives in licu of a salary. , has a $500,000 line of credit that can be drawn on for short-term financing. The line of credit balance is currently at zero and 5% annual interest is paid the following month on the outstanding bulunce at the end of the month; any excess cash is immediately used to pay down the line of credit. The cash balance is currently $40,000. Your uncle is also curious about horizontal analysis, vertical analysis and financial ratios and has provided a set of comparative financial statements and industry comparison numbers (Excel Appendix B). He would like you to analyze and explain the concepts of liquidity, solvency and profitability in a short report that includes your conclusions and any recommendations for improvement, please also include the current-year projections in the profitability ratio calculations. He is particularly interested if there is a way to generate more cash from the business