Analysis of Financial Statements

This presentation provides an analysis of financial statements, including the calculation of suitable ratios for the year 2018-19, the usefulness of ratio fluctuation for hotel management, and the benefits and limitations of ratio analysis. It also discusses the importance of ratio analysis in determining the financial position of a company and making informed decisions.

ANALYSIS OF FINANCIAL
STATEMENTS

Table of Contents
Introduction
Calculation of suitable ratios for the year 2018-19
Ratio fluctuation useful for Hotel Management
Benefits and limitations of ratios analysis that help to make
decision
Conclusion
References

INTRODUCTION
Financial statements are accounts compiled for financial
results and status at a certain moment of time by internal
manager of firm. A collection of reports usually contains a
balance sheet, income statements, equity report as well as
cash flow statements

Calculation of suitable ratios for the
year 2018-19.
All data in ‘000 except gross
margin 2018 2019
Gross profit 5050 5150
Net sales 5500 6000
Gross profit ratio 91.82% 85.83%
Gross profit ratio: Gross profit / net sales * 100
2018 2019
82
84
86
88
90
92
94
91.82
85.83
Gross margin

Continue
All data
in ‘000 except
current ratio
Year
2018
Year
2019
Current assets 1726 1624
Current liabilities 1339 1616
Current ratio
1.29
times
1.00
times
Current ratio: Current assets / current liabilities
2018 2019
0
0.2
0.4
0.6
0.8
1
1.2
1.4 1.29
1
Current ratio

Ratio fluctuation useful for Hotel
Management
The ratio study involves various forms of measures, each of
which is crucial to the interpretation of developments in a
firm’s financial position. Throughout the above section,
three forms of factors, competitiveness, leverage and
gearing ratio, were measured and evaluated. In this case, the
fundamental value of such ratios is discussed in relation to
the aforementioned Gastby Grange Hotel:

Benefits and limitations of ratios
analysis that help to make decision.
It is determined that when ratios are used correctly, then ratio
analysis shows several of the difficulties of the corporation or
even recognizes some that are positive for growth and even those
operation which needs major adjustments quick time to reduce
loses. After all, ratios are spies, who attract manager's attention
to issues which need to be handled. Several significant
advantages in the estimation of tourists and the hospitality
industry proportions, as mentioned below:

Conti….
Limitations of Ratio Analysis:
A business can change its financial reports to boost its
proportions by the end of a year. Alternatively, the amount
wind up and become nothing but gives the overall clear
image about company not in details.
Price point changes based on inflation are ignored. Many
computations are evaluated using ancient prices and these
price changes over the years are not taken into account.

CONCLUSION
In the end of report, it has been founded that ratio analysis help
to define the actual financial position of company during an
accounting year and support to make proper policies and tactics
to improve the weak areas of business. Different sort of ratios
such as liquidity, profitability, gearing support to determine the
various crucial aspect of business and figure out which area are
high performer and which needs modification.

REFERENCES
Kopanja, L., Tadić, M., Kralj, S. and Žunić, J., 2018. Shape and aspect
ratio analysis of anisotropic magnetic nanochains based on TEM
micrographs. Ceramics International, 44(11), pp.12340-12351.
Behkami, S., Zain, S. M., Gholami, M. and Bakirdere, S., 2017. Isotopic
ratio analysis of cattle tail hair: A potential tool in building the database
for cow milk geographical traceability. Food chemistry, 217, pp.438-444.
Helmy, M. and Arslan, H., 2018. Utilization of aerial heterogeneous
cellular networks: Signal-to-interference ratio analysis. Journal of
Communications and Networks, 20(5), pp.484-495.
Mo, Y. and et.al., 2017. Damping ratio analysis of a silicon capacitive
micromechanical accelerometer. Wireless Sensor Network, 9(5), pp.178-
188.

Thank You