Financial Proposal

Merlin Entertainments Group is one of the world's largest family entertainments visitor attraction operator. Over 30 million people visit their 52 attractions each year. In the UK, these include Madame Tussauds, the London Eye, Alton Towers, Legoland, Sea Life, Thorpe Park and much more. They are owners of internationally recognized brands in Legoland Discovery Centers, Madame Tussauds, Sea Life and Dungeons. They also have the development skills internally to identify land and build 4 or 5 new Midway Attractions each year.

Priority of Merlin Entertainment Group is delivery of memorable experiences to their millions of visitors constantly monitored visitor satisfaction, they have developed strategy, and the very high customer service and health and safety standards. This kind of location based entertainment, specifically tourist attractions, is dynamic, fast growing and fun.

Merlin Group Entertainment is different and unique, in terms of its range of quality, branded businesses and its commercial success (Merlin Entertainments Group, 2010). Merlin Entertainment Group uses marketing concept ,which is easily, applicable to a leisure services such as an event to succeed in their goals. According to Pine and Gilmour (1999) we moved beyond simply products and services it is not just trade anymore, these days it is more about engaging customers and giving them an experience which they cannot easily forget and which will make them return to the place.

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While Berridge (2007) explained that big impact on consumer has a design, brand name; example is a well- known brand name in leisure services like Merlin Entertainment Group. Events as services also differ from products in number of ways, we have to experience them to consume them (Bowdin, 2011). According to these facts Merlin Entertainment Group has succeed in their intensions and become a leader in the entertainment business.

Financial Statements provided will present us financial health of the company. To fully analyze firm, it is important to assess the value of the information supplied by management (M. Fraiser and A. Ormiston, 2010). The financial statements are giving as information of the financial position, performance and changes in the company. Financial report includes the following components: balance sheet, income statement, cash flow statement, a statement of changes in equity and notes to financial statements.

The balance sheet is a financial report of the financial position assets, liabilities or what the firm owes to others and equity what the inside shareholders or owners own on the particular date such as the quarter or year. Income or earning statement presents the results of operations- revenues, expenses, non-profit and loss per share for the accounting period (R. H. Parker, 2007).

Merlin Entertainment Company has showed in their accounts for 2009 that their profit was  769 million, revenue, in this case represents the amounts received from customers for the sale of goods specifically, admissions tickets, room revenue retail and food and beverage sales of which they are directly invested or spent on the different kind of costs  104. 4 million, principal costs under this category represent the expense of food and beverage and retail consumables according to this their gross profit was 664. 6 million.

Their indirect costs were  428. 9 million which means they earned  235. 7 million before finance income and costs, taxation, depreciation, amortization and impairment. Their loss for the year 2009 was  30. 8 million, we count total loss when we subtract profit which is  769 million, cost of sales, which is  104. 4 million and total expenses.

When we compare profit 2009 with profit in 2008 we can see that their profit was 662. 3 million which means that their total profit was less for  106. 7 million in 2008. Since their cost of sales were also less than in 2009 and they were  87. 9 million their gross profit was  574. 4 million when we subtract this amount with all expenses which were  373. 7 million we came to total of  200. 7 million.

This means that the difference between profit in 2009 and 2008 is 35 million, they made bigger profit in 2009 for this amount of money. Merlin Entertainment Group also succeed to reduce their loss compared to the year 2008 for 49. 1 million. As provided in the Merlin Entertainment accounts on page 6 we can find more details of exceptional and non-trading items in note 3 (Appendix 1).

By definition, 'the account balances on the balance sheet must balance; that means that total of all assets must equal the sum of liabilities and stockholders' equity' (M. Fraiser and A. Ormiston, 2010). In the statement of financial position of Merlin Entertainment Company non-current assets represent long term investments and intangible assets, such as goodwill recognized in business combinations, patents, trademarks, copyrights, brand names, and franchise.

Value of non-current assets as stated is  1. 891, 4 million. Details about assets are shown in notes 11, 12 and 13, goodwill represents amounts arising on acquisition of subsidiaries and joint ventures (Appendix 2). Current assets include cash, inventory, and marketable securities, prepaid expenses and other liquid assets that can be readily converted into cash. Value of current assets in 2009 is  139. 1 million. Value of total assets is  2,030. 5 million (Appendix 2). Current liabilities are what a company currently owes to its suppliers and creditors, and it shows that for 2009 current liabilities are 224. 7 million.

These are short-term debts, all due in less than a year, bank overdrafts, interest bearing loans and borrowings finance, leases, tax payable, and provisions (D. Adams, 1997). Liabilities are: "Total of funds owed for assets supplied to our business or expenses incurred but not yet paid" (Wood and Sangster, 2006, pg. 667). Non- current liabilities are opposite than current liabilities, it is the obligation that is not required to be satisfied in 12 months of the balance sheet date. With company's ability to pay its bills we measure a liquidity ratio. The denominator of a liquidity ratio is the

company's current liabilities, obligations that the company must meet soon, usually within one year. We count liquidity ratio by dividing value of current assets and current liabilities, and it would look like this  139. 1 million / 224. 7 million =  619. 047. (J. Robertson and W. Mills, 2000), (Appendix 2). Anything the firm owns or has title to are assets. Net assets are: Net Assets = Total Assets - Total Liabilities. We use the net assets to measure value of the business, the value of everything the business owns after all the debts have been taken account of.

Net assets of Merlin Entertainment Company are  481. 6 million =2,030. 5 million -  1,548. 9 million. in 2009 while in 2008 net assets were 476. 6 million excluding non-current shareholders loans. After the shareholders loan which is 481. 6 million and non-current shareholder loans net liabilities and total equity are  114. 3 million. Equity capital represents invested money which is not repaid to the investors in the normal course of business, it is the risk capital stalked by the owners through a purchase of the firm's common stock (J. Robertson and W. Mills, 2000),(Appendix 2).

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