Financial Analysis of Hotel Assignment

Added on - 03 May 2020

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RUNNING HEAD: Financial analysis of hotel1Name of the studentTopic-Financial analysis of hotelUniversity name-
Financial analysis of hotel2Table of ContentsAssessemnet-1.....................................................................................................................3Executive summary..............................................................................................................3Introduction.........................................................................................................................4Benefits associated with creating a Decision Support System..........................................14Recommendation..........................................................................................................14Assessment-2.....................................................................................................................16Introduction.......................................................................................................................16Answer to question no-A...................................................................................................17Answer to question no-B...................................................................................................19Answer to the question no-3.............................................................................................22References.........................................................................................................................24Appendix............................................................................................................................26Case-2 Extension case........................................................................................................32
Financial analysis of hotel3Assessemnet-1Executive summaryIn this report, study has been prepared on how Hotel organization could use all theavailable plots and spaces to build the rooms for the single, double and family. There are severalconstraints and cost which have been undertaken while drawing the possible conclusion for thehotel. This Mabel hotel is family owned hotel which has been implementing proper level ofbusiness functioning to increase its overall turnover. It is evaluated that if Mabel hotel couldinclude the swimming pool then the cost of construction and solver will change accordingly. Thesolver has been used to identify the possible answer for the optimum use of the spaces forbuilding the rooms for clients.
Financial analysis of hotel4IntroductionWith the ramified changes and increasing demand of the rooms of the Mabel hotel, thishotel has been planning to build the rooms for the single, double and family. It has beenobserved that there are several demands for the family rooms and double rooms. However, thetotal revenue and cost of the particular rooms are dependent upon the various factors such asmeals required parking lot cost and construction values. In the starting of this report, calculationof cost of the construction and revenue earned by company has been taken. After that, solver hasbeen implemented to evaluate the extension and base case of the hotel construction value.However, The Mable Hotel has to identify the maximum profit that it could earn by constructingthe rooms for the single, double and family occupancy.
Financial analysis of hotel5It is given that The Mable Hotel could build the following units for the construction ofthe rooms.MAXIMUM NO. OF UNITS30UNITSMINIMUM NO. OF UNITS25UNITSMINIMUM NO. OF SINGLEUNITS10UNITSMINIMUM NO. OF DOUBLEUNITS5 UNITSMINIMUM NO. OF FAMILYUNITS10UNITSBasic toolsExcel tool- In order to compute the possible cost and revenue from the occupancy of thesingle, double and family rooms, The Mable Hotel could use excel tool. As it is given in thequestion that it is compulsory to use at least 5850 square meters of land and not more than 30units can be built in total, so this is the best possible match in this situation ,in all other cases theconditions left unsatisfied.
Financial analysis of hotel6However, by using the excel tool, following income statement has been computed asbelow.PARTICULRSSINGLE (10 UNITS)DOUBLE(7 UNITS)FAMILY(13UNITS)TOTAL($)($)($)REVENUE:ROOM RENT3672002716568002801439136RESTRAUNT REVENUE54000138600449280641880TOTAL REVENUE42120041025612495602081016EXPENSES:HOUSEKEEPINGEXPENSES148500103950294840547290RESTRAUNT EXPENSES4752090090292032429642TOTAL EXPENSES196020194040586879769
Financial analysis of hotel7232REVENUE OF 1 YEAR2251802162166626881104084REVENUE OF 10 YEARS22518002162160662688011040840COST OF CONSTRUCTIONOF UNITS74520068992034361604871280COST OF CONSTRUCTIONOF PARKING LOT144550101185187915433650TOTAL COST OFCONSTRUCTION88975079110536240755304930NET REVENUE1362050137105530028055735910TAX@33%449476.5452448.15990925.651892850.3NET INCOME AFTER TAX912573918606201183843
Financial analysis of hotel8.5.8579.35059.7It has been observed that if The Marble hotel will construct the family rooms then it willhave possible higher profit to $ 2011879.35 value. However, in order to keep pace with the otherrivals in hotel industry, The marble hotel should construct other single and double rooms even ifit provide less sell in market.In addition to this, it is evaluate that if The Marble hotel wants to utilize all the spacesthen it will have to identify the proper square meter and probability of constructing single,double and family rooms for the effective use of available spaces.In part-1 there are following consideration has been madeParticular(SQ. M.)TOTAL AREA OF LAND5900AREA OCCUPIED BYMINIMUM NO. OF UNITS4715AREA LEFT1185NO. OF EXTRA UNITS THATCAN BE BUILT5
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