Financial Analysis for Managers

Running head: FINANCIAL ANALYSIS FOR MANAGERS
Financial Analysis for Managers
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

1FINANCIAL ANALYSIS FOR MANAGERS
Table of Contents
Introduction:....................................................................................................................................2
Question 1:.......................................................................................................................................2
Introduction:................................................................................................................................2
Task A:.........................................................................................................................................2
Task B:.........................................................................................................................................6
Analysis of profitability position and financial position of Gulf Hotels (Oman) Company
Limited SAOG:............................................................................................................................7
Question 2:.....................................................................................................................................10
Task A:.......................................................................................................................................10
Task B:.......................................................................................................................................11
Task C:.......................................................................................................................................12
Question 3:.....................................................................................................................................12
Task A:.......................................................................................................................................12
Task B:.......................................................................................................................................13
Task C:.......................................................................................................................................14
References:....................................................................................................................................15

2FINANCIAL ANALYSIS FOR MANAGERS
Introduction:
The current assignment would provide a brief overview of the financial performance of
an organisation listed in Muscat Securities Exchange. The evaluation would be conducted with
the help of vertical analysis and horizontal analysis, which would assist in identifying the trends
in particular line items of the financial statements of the chosen organisation. Based on such
analysis, appropriate recommendations would be provided to the organisation so that it could
improve its financial performance in future. The second section of the assignment would deal
with undertaking suitable investment decision based on the provided alternatives with the help of
internal rate of return. Finally, the assignment would shed light on identifying the most profitable
scenario for the fertiliser manufacturer based on CVP analysis.
Question 1:
Introduction:
For this section, the organisation that has been selected is Gulf Hotels (Oman) Company
Limited SAOG. It owns and operates the Crowne Plaza Hotel in Muscat, the Sultanate of Oman
and it is listed in Muscat Securities Market (Bloomberg.com 2019). In this section, critical
analysis has been made in terms of evaluating the financial standing of the hotel in the Oman
market. The techniques used vertical analysis and horizontal analysis of the income statement
and balance sheet statement of the hotel for the past three years, which have assisted in gaining a
clear insight of its performance in the hospitality industry of Oman.
Task A:
Income statement (Profitability position):

3FINANCIAL ANALYSIS FOR MANAGERS
Vertical analysis of income statement for the years 2016-2018:
Particulars 2016 (in RO,000) Percentage 2017 (in RO,000) Percentage 2018 (in RO,000) Percentage
Revenue 8,186 100.00% 8,175 100.00% 6,342 100.00%
Operating costs 5,865- 71.65% 5,821- 71.20% 5,273- 83.14%
Management and licence fees 225- 2.75% 227- 2.78% 153- 2.41%
Reservation and market assessment fees 120- 1.47% 120- 1.47% 92- 1.45%
Operating profit 1,976 24.14% 2,007 24.55% 824 12.99%
Finance income 5 0.06% 7 0.09% 7 0.11%
Finance costs - 0.00% - 0.00% 28- 0.44%
Other income - 0.00% - 0.00% 35 -0.55%
Fair value loss on financial assets at fair value through profit or loss-
unrealised - 0.00% 24- 0.29% - 0.00%
Profit before taxation 1,981 24.20% 1,990 24.34% 838 13.21%
Taxation 246- 3.01% 373- 4.56% 127- 2.00%
Net profit for the year 1,735 21.19% 1,617 19.78% 711 11.21%
Horizontal analysis of income statement for the years 2016-2018: