StudentShare solutions
Triangle menu

Financial Ratios Analysis - Essay Example

Nobody downloaded yet

Extract of sample
Financial Ratios Analysis

d. Cost of beverage sold percentage: Cost of beverage sold as percentage of total beverage sales. This works out to be 22.9%, which is within the range of industry average of 20-25%. Interestingly, the actual is very close to budgeted average of 22.5%. This shows that while management has made efforts to achieve what was budgeted, the efforts are certainly within the industry average.
e. Average daily rate: This is taken as Room revenue to paid room nights. The paid room night is taken as 7555 and the average daily rate works out to be $62.7. As the value for previous year is not available, it is not possible to compare.
f. Profit margin: This is income to revenue. The margin works out to be 56.4% of revenue. Profit margin has been worked out separately for room services and F&B. Profit margin for room service stands at 78.2%, which is marginally higher than the industry average of 70-75%. At the same time, F&B division has profit margin of 22% as against the industry average of 15-25%.
g. Total revenue change from budget for rooms and F&B: This is actual revenue to budgeted revenue. This is almost one for F&B; but 0.88 for rooms. This is further corroborated by poorer occupancy rate. Marketing of room service is essential in this context.
h. Housekeeping cost per occupied room: This is ratio of total housekeeping costs to total room sold. The actual is 6.5 which are substantially lower than budgeted 7.6. Thus, it appears that housekeeping costs has been controlled considerably.
i. Room sales to total sales: This is a good indicator to gauge revenue generation by rooms. On the whole, room sales contributed 61.1% of total revenue. But this is found to be lower than budgeted 64.3%. This calls for some strategic intervention to boost up revenue collection from room service.
Based on the above analysis, it can be concluded that F&B division has performed well in comparison ...Show more


Occupancy percentage: This is defined as a ratio of rooms sold to rooms available. Total number of rooms sold is 7555. Given this, the occupancy percentage works out as 24.4. Normally, 60 to 70 is the average occupancy rate and hence the hotel has not performed well. This…
Author : lueilwitzcreola
Financial Ratios Analysis essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Financial Ratios Analysis"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy
The gross income value of an organization serves as the basis for the payment of further expenses and future reserves. The gross income margin of an organization can be calculated as the ratio of its revenue less its cost of sales to its revenue value. i.e., Gross Income Margin = (Revenue – Cost of Sales)/ Revenue The cost of sales refers to the direct expenses involved in the manufacturing of the products sold by the organization.
9 pages (2250 words) Essay
Profitability ratios in financial ratio analysis
As per the Income Statement and the Balance Sheet, the company seems to be a very good profitable organisation but a mere look upon these two financial statements do not give a decisive position about a company’s performance, hence proper analysis needs to be done.
5 pages (1250 words) Essay
Inadequacies of accounting ratios as tools of financial analysis
A series of specific guidelines on issues critical to correct interpretation of such accounting ratios is included along with specification of pitfalls. A variety of ratios are used in financial analysis. Without specifying these ratios in detail we can classify their broad financial grouping under short-term solvency or liquidity ratios, long-term solvency or financial leverage ratios, coverage ratios, profitability ratios and market value ratios.
3 pages (750 words) Essay
Critical analysis of evolution of capital structure and cost of capital and financial ratios of tottenham hotspur plc between 2002 and 2007
The company acquired Star Furnishing Limited during the fiscal year ended 30th June 2006. Tottenham Hotspur Football & Athletic Co. Limited, which is a professional football club, White Hart Lane Stadium Limited, provider of football entertainment and Tottenham Hotspur Finance
4 pages (1000 words) Essay
Financial ratios
Industry comparison is another method wherein the firm’s ratios are compared with the average ratios of the industry to explore what is the standing of the
2 pages (500 words) Essay
Financial ratios analysis
According to this plan, they will not send any waste to landfill by 2012. (Marks & Spencer, 2010) The company offers clothing and food, as well as home ware, furniture and technology. The company gained recognition and importance in the British business
4 pages (1000 words) Essay
Briefly analyse the above ratios and comment on the significant features in your analysis which would require further investigation from an audit perspective. iv) Critically discuss the changing role of the auditor from one of verifying financial transa
The company is almost at par to the industry average of £2.5 of current assets for every £1 of current liabilities. However, insights into the company’s financial statements show that GHO plc holds much of current assets in
6 pages (1500 words) Essay
Critical Assessment and comparison of the Competitive and Profitabbility of UK food retail Sector and the UK Oil and Gas Sector 2006-2010
In order to conduct the analysis, the researcher considered SWOT analysis, Porter’s Five Forces Model and financial ratios analysis of the companies for the past five years. The analysis of the two sectors has revealed that there are
4 pages (1000 words) Essay
Financial Ratios Analysis and Comparison Paper
A comparative analysis with a local healthcare organization namely, Health Management Associates have been conducted to determine the scope of improvement in the performance of healthcare services. The financial ratios play a
3 pages (750 words) Essay
Financial ratio analysis
This exemplifies that Qatar Cinema Company is vulnerable financial distress. From the liquidity ratio, it is clear that Qatar Oman Company is proficient of paying its debts
1 pages (250 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment