Financial Statement Analysis of Gillette Ltd

Analysis of the financial
statements

Executive Summary
The report is based on the hotel management company named as Gillette. The study will be
presenting the financial analysis of the firm by making use of the ratio analysis tool so that
profitability, liquidity and leverage position of the company could be assessed in an effective
way. This tool played an important role with respect to making a comparative analysis fro the
two periods in order to determine the trend. Though this tool is attached with various limitation
like manipulation, estimated figures etc. so it cannot be used as an accurate and reliable measure.

Table of Contents
Executive Summary ........................................................................................................................2
INTRODUCTION...........................................................................................................................4
Financial analysis.............................................................................................................................4
Trends of financial analysis ............................................................................................................4
Liquidity analysis.........................................................................................................................4
Profitability analysis...................................................................................................................5
leverage or gearing analysis.........................................................................................................6
Efficiency analysis.......................................................................................................................6
Knowledge generated from ratio analysis ...................................................................................7
Benefits and the limitation of using the ratio analysis in making decisions within tourism
industry .......................................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Financial statement analysis is a practice of assessing financial information of an entity
for the purpose of making appropriate decisions. External stakeholders uses it for understanding
an overall organizational health and in evaluating financial performance and value of the
business. The present report is based on Gillette Ltd which is seen as the hospitality company
that is involved in managing the portfolio of the hotels in the United Kingdom and the Northern
Ireland. Furthermore, the study highlights computation of the ratios for making financial
analysis and present liquidity, profitability and gearing position of the company. Moreover, the
report describes uses or importance of the ratio analysis and the benefits & limitations associated
with the ratio analysis tool.
Financial analysis
Trends of financial analysis
Liquidity analysis
It refers to the measurements that are used in examining an ability of an enterprise in
paying off its current obligations (Kahn and Baum, 2020). The major liquidity ratios includes
current and the quick ratio which depicts the liquidity position of the company in an overall
market or an industry.
Gillette
Liquidity ratio
Particulars Formula 2018 2019
Current assets 2325 2730
Current liabilities 990 752
Current ratio
Current
assets/Current
liabilities 2.35 3.63
Current assets 2325 2730
Inventory 700 900
Quick assets 1625 1830
Current liabilities 990 752
Quick ratio Quick assets/Current 1.64 2.43