Financial Management Report: Gatsby Grange Ratio Analysis and Findings

This report provides an analysis of financial management within the hotel industry, using Gatsby Grange as a case study. It begins with an introduction to financial management principles, emphasizing the use of ratio analysis. The report then delves into a detailed examination of Gatsby Grange's financial performance, focusing on profitability, liquidity, and gearing ratios. Specific graphs are used to illustrate the financial results. The analysis includes an evaluation of the company's performance in 2018 and 2019, highlighting strengths and weaknesses. The report concludes with recommendations for improving the company's financial health, such as reducing costs, improving liquidity through increased capital assets, and reducing reliance on loans. The study emphasizes the importance of financial management in the hotel industry, providing valuable insights and practical recommendations for business improvement.

Title
FINANCIAL MANAGEMENT FOR THE HOTEL INDUSTRY

Table of content
Introduction
Content included in report
Conclusion
Suggestions
References

INTRODUCTION
A business seeks to accomplish its objectives by raising funds from various outlets
and then investing in multiple asset groups such as farms, land and structures,
machinery and other intangible properties. Accrual analysis employed numerical
decision-making to deal with financial matters. The thesis involves Gatsby Grange 's
ratio review, which is the famous UK and Northern Ireland boutique store. As well as
this presentation of power point, it is focused on the content review listed in report
and conclusions.

Content included in report
The principal part of the study is focused on Gatsby Grange corporation's estimation
and review of ratios. Three forms of ratios which are productivity ratio, liquidity ratio
and gearing ratio are measured and described in the first function of study. Specific
forms of graphs have been used to show financial results more accurately in order to
do adequate ratio research. In addition to this function, knowledge is provided
regarding the value of ratio analysis and its weakness.

Conclusion
This can be indicated from various parts of the report that ratio analysis is one of the
key terms that firms need to apply to assess their business results. This can be
inferred from section A of mission one that:
 Profitability ratio- Performance of the company is average on profit margins. That
is possible since a specific finding is given by ratios. This is relevant here to
remember that the success of the company was stronger in 2018, but dropped in
2019 next year.

Continue
Liquidity ratio- Under it are measured two forms of ratios which are current and
rapid ratios. From the research performed earlier, it can be inferred that’s liquidity
situation is too poor. That is because all liquidity ratios produce negative effects as
result is smaller than the optimal type of ratio. Moreover, in order to allow repayment
of short-term loans or existing liabilities, it can be expressed to this that the cause of
weak liquidity status is lower net assets.

Continue
Gearing ratio- Performance of the company is similar in terms of this
ratio so because debt-to - equity ratio is lower than assumption.
While the debt level for the years 2018 and 2019 is larger. That's
because companies have ample money to pay back their debts. But
at the other hand, they lack the equity to pay off their debts.

Suggestions
Based on the aforementioned assumption, it could be
recommended to the management and owner of Gatsby
Grange that they will seek to reduce total costs as they
are unlikely to achieve higher operating income and
gross margin owing to greater levels of expenses.

Continue
In order to boost the liquidity situation, the company's
financial manager will work on increasing the sum of
capital assets so that they will provide enough resources
to pay back short-term debts. This can only be done if the
business concentrates on creating its own funds rather
than on relying on loans.

Continue
In addition, they must try to increase their equity by
inviting more interested parties to make investments. The
business must not take out loans from external sources in
order to reduce the volume of the debt.

References
WADEKAR, S. and ASHTEKAR, M.S.M., 2020. Working Capital Management with
Ratio Analysis in BG Shirke construction Pvt. Ltd. Studies in Indian Place
Names, 40(70), pp.4677-4689.
Singh, J. and Singh, J., 2019. Atmospheric Muon Charge Ratio Analysis at the INO-
ICAL Detector. Advances in High Energy Physics, 2019.

End
Thank you