Fort Cinema

Location: Fort Scott, KS

Description:

We created a spreadsheet model for Fort Cinema movie theater located in Fort Scott, Kansas. This model includes a pro forma income statement, balance sheet, weighted average cost of capital calculation, free cash flows, as well as probabilities of good and bad markets. All of these forecasts are based on assumptions from researching the financial statements of other movie theaters. Included in the forecast is revenue generated from concessions and the arcade, which make up a significant portion of their income

Fort Cinema is currently listed for sale on loopnet.com for $949,500. Based on our assumptions, we believe the asking price is too high and needs to be lowered. Fort Scott is a small town with a population of just over 8,000 people. Fort Cinema has the capacity to show 15 movies a day in its three 100-seat theaters. That’s a potential sales of 1,500 seats a day. Our optimistic projections show that they would be able to fill 25% of those seats a day, and at that rate they would be generating an average annual net income of $12,500 over a ten year period. However, if the market is bad and they can’t get as many customers as projected, there could be significant losses.