Assignment on Sayaji Hotel Ltd PDF

I. Introduction
Coming out as one of the top India-based hospitality company, Sayaji Hotels Ltd. was
assimilated in April 1982 and commenced in the year 1987 under the direction of Mr Sajid R.
Dhanani. Starting off with the first hotel in Vadodara, followed by properties in other cities
such as Indore, Pune, Bhopal, Kolhapur, Raipur and Gurugram. With more upcoming
properties in Bhopal and Zirakpur, Sayaji Hotel Ltd has four sub-brands under its name,
namely, Enrise by Sayaji, which is a full service, mid- scale and upscale resorts. Their target
market is Leisure travellers who want comfort luxury at an affordable price. Effotel by Sayaji
on the other hand is a four star and upscale business hotel. Sayaji Hotels provide full service
five star luxury experience and services. Lastly, Barbeque Nations restaurant became of the
leading casual dining chain in India is under Sayaji Hotel Ltd. With 10 hotels, 28 restaurants
and 8000+ employees, Sayaji Hotel Ltd. is emerging as a pioneer in Indian Hospitality
Brands. Sayaji Hotel Ltd. has also been awarded with The Economic Times ‘India’s Best
Companies to Work For’ in 2018 and 2019.
II. Methodology
To understand and analyse the financial feasibility of the company taken, the annual report of
Sayaji Hotel Ltd. for 2019 was taken from the official website of the company. The report
was for year ending March 2019 and year ending March 2018 that were used for horizontal
comparison analysis. The financial statements used were as follows:
1) Balance Sheet
2) Statement of Profit & Loss for the year
3) Cash Flow Statement for the year
III. Discussion and Analysis
The tool which is used for the comparison is Ratio Analysis, under which five ratios were
used, namely:
 Liquidity Ratio
 Profitability Ratio
 Investors Ratio
 Solvency Ratio

 Activity Ratio
1. Liquidity
When a company is falling short to pay off their short term liabilities, they convert the
already available assets into cash quickly and cheaply. This comprises of companies
capability to quickly sell their assets to raise cash. To analyse and calculate the liquidity ratio,
the following ratios were used: Current Ratio, Quick Ratio and Cash Ratio.
A Ratio 2019
(In Lakhs)
2018
(In Lakhs)
Current Ratio
Current Assets
Current Liabilities
5,116.50 4,783.67
6,876.40 5,155.84
0.74:1 0.92:1
Interpretation: Current Ratio, also referred as Working Capital Ratio, helps in analysis and
comparison of current assets with current liabilities which infers us to understand if the
available current assets (which can be converted into cash within a year) are adequate to
settle the current liabilities (Which needs to be paid off within a year). In the above work
note, a decrease 0.18 in the current ratio is seen. For hospitality companies ratio of 1.5 is
considered good and safe i.e. the available current assets are enough to settle the liabilities. In
case of Sayaji Hotels Ltd., the ratio shows that in 2019 the ratio decreased drastically.

B Ratio 2019
(In Lakhs)
2018
(In Lakhs)
Quick Ratio
Quick Asset
Current Liabilities
2,331.87 2,356.41
6,876.40 5,155.84
0.33:1 0.45:1
Interpretation: Quick Ratio evaluates the relation between the Quick asset or liquid asset and
Current Liabilities. Quick asset is considered as the readily available assets which can be
converted into cash within a short period of time without inferring any loss. A higher ratio is
considered better which means the company is able to pay off its liabilities quickly. In the
above working note, the ratio has decreased by 0.12. Generally, the ratio of 1:1 is considered
satisfactory to pay off the liabilities as quickly as possible.
C Ratio 2019
(In Lakhs)
2018
(In Lakhs)
Cash Ratio
Cash/ Cash Equivalents
Current Liabilities
411.54 1,214.95
6,876.40 5,155.84
0.05:1 0.23:1
Interpretation: Cash Ratio shows the company’s capacity to pay off the liabilities using cash
(Currency) and cash equivalents (Readily convertible assets). The above work note indicates

that the company doesn’t have enough cash or cash equivalents to pay off their liabilities.
Since the acceptable ratio is considered to be 1:1.
2. Profitability Ratio
As the name suggest, profitability means the extent to which a company yields or gains
profit. Profitability Ratio is the measure of a company’s financial gain or simply the
company’s capacity or capability to make profit. Profit can be described as the final income
remaining after the deduction of costs and expenses. For the analysis various ratios such as
Gross Profit Ratio, Net Profit Ratio and Return on Asset were used.
A Ratio 2019
(In Lakhs)
2018
(In Lakhs)
Gross Profit (Loss) Ratio
Profit (loss)Before Income & Tax
× 100
Revenue from Operations
6.33 (376.45)
21,824.54 19,150.44
0.02 % -1.96%
Interpretation: Gross Profit Ratio indicates the relationship between Gross Profit of the
company and net sales. This is used to evaluate the performance of the company in terms of
its operation. Commonly, a higher Gross Profit Ratio is considered favourable as it infers that
the overall profit is sufficient to cover all the expenses and still generate a profit. In case of
Sayaji Hotels Ltd. an increase of 1.98% in Gross Profit Ratio was shown from year 2018 to
2019 but the overall profit for was still less. This means that the company has bear minimum
profit to cover up for the expenses but an improvement was shown in the year 2019.