Financial Analysis of Crystal Hotel

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BIZ201 Accounting for Decision Making

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Executive Summary
The present report has been presented for carrying out an analysis of the financial
position of Crystal Hotel by the use of financial analysis technique of ratio and vertical analysis.
It has been identified with the use of these techniques that the hotel need to improvise over its
problem of improving the employee wages and reducing the outstanding invoices amount for
supporting its renovation model.

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Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Income statement comparison with industry benchmark using vertical analysis............................5
Comment on the profitability, efficiency, liquidity and solvency of Crystal Hotel through using
the financial ratios............................................................................................................................6
Additional industry specific performance indicators used as benchmarks to compare the
performance...................................................................................................................................10
Conclusion and Recommendation.................................................................................................11
References......................................................................................................................................12

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Introduction
This report has been carried out for demonstrating the application of relevant accounting
concepts for analyzing a given business scenario. The given case study has presented a business
scenario relating to Crystal Hotel Pty Ltd that is a privately owned star hotel located within
Sydney. It is recently facing the issues regarding its long-term contracts that lead to the issue of
developing outstanding invoices. Also, the hotel is facing the difficulty regarding maintaining
good quality staff. The owners are considering renovation of the hotel and as such considering
capital investment for improving its financial performance. In this context, the hotel presents an
analysis of the financial statements of the hotel for identifying the areas for improvement and
carrying out future analysis. The financial statement analysis consists mainly of carrying out
vertical and ratio analysis for evaluation of the financial position of the hotel in comparison to
the industry benchmarks.