Topic: Analysis of the Financial Statements. Holiday Inn, London Regents Park

Task 1
Analysis of the Financial Statements (85% of total marks overall)

The Holiday Inn, in London Regents Park is part of the IHG group of Hotels. As the Company Accountant, you have been tasked to produce a report for the Chief Executive addressing the following:

• Calculate suitable ratios for 2019 and 2020 to aid the analysis of the financial information included within the attached financial statements. You should discuss the trends seen in these ratios in detail, and draw appropriate conclusions about the profitability, liquidity and gearing of the hotel chain.

• Discuss why an understanding of ratios and their fluctuations is essential for Hotel management in analysing the information seen in their financial statements.

• Discuss the benefits and limitations of using ratio analysis to aid decision making within the hotel and tourism industry (2000 words)

Task 2
Presentations (15% of total marks overall)

Produce and deliver a 5 minute presentation which gives a brief overview of the report contents and conclusions.

You will be to produce a recording of your presentation, or present live via Teams.

PROFIT AND LOSS ACCOUNT
2019 2020
£000 £000 £000 £000

Sales 7,972 3,971

Less: cost of goods sold
Opening stock 780 650
Purchases 200 210

Less: Closing Stock (650) (580)

                        330                280      

Gross Profit 7,642 3,691

Less: Expenses
Rent 90 90
Rates 80 80
Motor Expenses 50 45
Advertising 70 60
Light and Heat 68 40
Depreciation 70 72
Insurance 50 50
Repairs 90 10
Bad Debts 70 9
Salaries 140 80
Loan Interest 10 5
788 541
Net Profit for the Year 6,854 3,150

Balance Sheet at 31st August
2019 2020
£000 £000 £000 £000
Fixed Assets (at net book value) 14,800 14,800

Current Assets
Stocks 650 580
Debtors 1,000 800
Cash at Bank 700 450
Cash in Hand 5 5
2,355 1,835
Current Liabilities
Trade Creditors 1,050 1,200
Accruals 150 70
Bank Overdraft 150 180
1,305 1,450

Net Current Assets 1,050 385

Total Assets Less Current Liabilities 15,850 15,185

Long – Term Liabilities
Bank Loans 110 110

                                    15,740                   15,075

Represented by:
Capital 8,886 11,925
Profit for the Year 6,854 3,150

                              15,740                     15,075

Type of service: Academic paper writing
Type of assignment: Report
Subject: Finance
Pages/words: 4/2000
Number of Sources: 11
Academic level: Undergraduate
Paper format: Harvard
Line Spacing: Single
Language Style: UK English

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