Planet Coaster Park Financials: How to apply the numbers

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Offline willwheeler2014

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Hey All,

It's been a while since I've update Hollywood Thrills with a broken computer but in the mean time, maybe I can teach you all something about the financials of the park. While Planet Coaster does let you be as creative as you want. I think a very interesting factor is the management aspect of things so I'm going to show you what a parks Financial Statements are (and it will help me apply my major).

I'll we working with a random scenario park but I will be showing you how to manage operations in the park, plan for attractions based on Cash Flows (Ticket Sales), making the statements (Balance Sheet, Income Statement), and maybe you can get a glimpse of what the parks we love are doing behind the scenes everyday.

I'll start posting segments this weekend so I can compile information. I'm just doing this for the fun of it and just to give you an interesting concept on how to apply the other factors of Planet Coaster when building a park.

See you all for the First Segment dropping Sunday!


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Planet Coaster Financials 1: The Balance Sheet
« Reply #1 on: June 03, 2018, 03:51 PM »
Hey All,

So for this first part, I'm going to work teach the Balance Sheet. Every company, private or public, makes a balance sheet that describes its' Assets, Liabilities, and Equity. All of business comes down to these three aspects, even in Theme Parks in ensuring the success of a business. Where many companies will have different accounts on theirs, I'm going to focus on that of theme parks and that which I can actually calculate in Planet Coaster.



Here's a theme park company you might not know the name of but they run a multitude of parks across the world, their most famous chain being the Legoland Parks.



This is a look at what a balance sheet is composed of. This covers all their parks put together (consolidated) so it's hard to pinpoint any one aspect. I'll go into detail on some of the aspects in it to help you connect your parks to the real world.

The Assets part of the balance sheet is where a park manager would put any and all property, inventory (merchandise, food, etc) and anything in the park that has an economic value and that the managers can control. Essentially every tangible aspect of a park is considered an asset as it helps the park build revenue and the park has every right to build it, sell it, or change it.

The Liability section shows all the parts that a park managers owes to someone else, liability is also known as debt. In Planet Coaster, the only form of liability is when one takes out a loan. What is essentially happening in that instance is that you are letting a bank or another financial intermediary (a financing company... don't need to know for Planet Coaster) take priority to a certain amount of the revenue you make for a bit of time while you use the loaned amount to pay for improvements or new attractions. The Loan labeled in the balance sheet is equal to how much money you borrowed from the bank. When we get to the Income Statement section of this lesson, one will see you pay interest on your debt and end up paying the bank a bit more, the fee of having money in your hands now rather than waiting until you can save up.

The Equity section is the final part of the Balance sheet. Equity essentially describes how much of your company do you own as well as money you made last year, (retained earnings). This game doesn't touch equity by any means so we will be using it purely as a plug, a way to balance the balance sheet.

When everything is summed up you reach the "balance."
Assets = Liabilities + Equity

Here is a Park I'm going to create while I work on this Financial Lesson to show you where you can find the numbers. This park is definitely a work in progress but I will change into Scenario mode to show actual dollar amounts when running the park.



I'm building a Micro-ish park to look like a location on International Drive which is a famous street for theme parks in Orlando, Florida. I have up a few attractions as building blocks to simulate what might a park start with before it opens. Within the next segment, I will get it looking ready enough to actually be open but this will work for the beginning Balance Sheet.



The park is currently made up of just Attractions and Building Facades, all of which are on the balance sheet.

The First Step of a Balance Sheet is making a list of your assets.

Assets:
Cash - This is your on hand cash as shown in the lower left hand of the screen. This is money you have right now to do what you want with. Cash can come from revenue made in the park and also Bank Loans.
Inventory - This is a big aspect in every business, but can't be calculated in Planet Coaster. Inventory would describe the value of all the merchandise you have (tshirts, hats, gift items, balloons) and all the food (burgers, churros, hot dogs, candy, etc.) This account is full of any item you sell to guests.
Short Term Assets - Marketing in Planet coaster would be a short term asset, those campaigns in the game run less than a year and you pay for the entirety of it upfront. Another short term asset that is more apparent in real parks but now in planet coaster are leases. Leases could be used to show the value of the rent you have prepaid for or leases could also show the Intellectual Property you rent. Six Flags leases DC Characters, Cedar Leases Charlie Brown Characters.

Long Term Assets - This is composed of all the attractions and properties (buildings, stores) that are in the park. A roller coaster, a flat ride, a restaurant, facades, buildings,  animatronics, lights, props, trashcans, benches (foliage in Planet Coaster) ... all considered long term assets that bring the majority of Value to your park. At anytime, you could delete one of these developments, and the game will sell it for you and reimburse you with cash.

Liabilites
Note Payable - This is the financial term for a bank loan. This is the main form of liabilities in Planet Coaster though I will go into a few more that are in the game kind of.
Wage Payable - This is a category that shows how much money you owe to your employees. In Planet Coaster, you will never see this unless your cash is at less than zero then it would show up on a balance sheet. Wages payable in that instance is money you have yet to pay your employees but will do so in the future, hopefully. The game automatically pays employees even when you are have negative cash so it's not that big of a part in the game.
Utility Payable -  Similar case as the first one but describes all the money you owe to companies for electricity, gas, or water. While there is no reference to a utility company or something of that sort in Planet Coaster, you can find amounts for this when you are putting down lights, props, animatronics, called the maintenance or running fee. That is the Planet Coaster version of utilites.

Equity

Retained Earnings - This is the only number one could calculate for equity in planet coaster. This account stands for all the money made - all the expenses incurred (expenses that happened) during the last year. This is the final part of a Balance Sheet.
Common Stock - This will be the plug for this segment as we can't sell ownership of the park to other people.

Here is the Balance Sheet I made for the IDrive Park



Cash is set to $10,000 as that is what the scenario will start with when I start working on the park.
All the attraction prices were found by looking up the Blueprint cost of each of them. When I do more work in the park I will label each of the attractions and show you where to find more information on their prices.

Currently their are no loans for the park so for the equation Assets = Liability + Equity to work, it must all come from equity at the moment. Only in Planet Coaster is this true, for the most part. Most people when they want to start a park have to take out sizable loans to pay for construction of attractions, but that is not the case in scenario editor.



This is the first segment looking at the financials. Once I move off of Scenario Editor and actually play use cash rather than unlimited funds, the park will become more realistic as in closer to the actual behind the scenes work of a real park. I hope this was an interesting use of your time. I will try to get the next part done before Friday. If you have any questions, or are better at Finance than me and would like to help, put a comment down below!

Have a nice rest of your weekend!
« Last Edit: June 03, 2018, 03:52 PM by willwheeler2014 »