Ratio Analysis of Langham Hotel

Running head: RATIO ANALYSIS OF LANGHAM HOTEL
Ratio Analysis of the Langham Hotel
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1RATIO ANALYSIS OF LANGHAM HOTEL
Executive Summary
Langam is positioned as a renowned hospitality and restaurant company all over Australia that
owns and invests in a portfolio of hotels with a primary focus on other restaurant joints in
Australia. The paper considered analyzing the financial position of the company based on the
ratio analysis focused on which suitable recommendation will be provided. It was gathered from
the paper that there has been decrease in the occupancy rate within the hotel and the average
room rate has been increased by the hotel over the three years. This is the reason for which
Langam hotel is being efficient enough in paying for all its liabilities by using its assets.
Moreover, The Langam hotel is not being able to address its short-term obligations through
employing its highly liquid assets. To deal with such concern, the Langam Hotel is
recommended to increasing the hotel services portfolio in all its business locations along with
developing strategies of increasing its banqueting business.

2RATIO ANALYSIS OF LANGHAM HOTEL
Table of Contents
1. Introduction......................................................................................................................3
2. Horizontal Ratio Analysis................................................................................................3
2.1. Liquidity Ratio Analysis...........................................................................................3
2.2. Solvency Ratio Analysis...........................................................................................7
2.3. Profitability Ratio Analysis....................................................................................10
3. Conclusion.....................................................................................................................14
References..........................................................................................................................15

3RATIO ANALYSIS OF LANGHAM HOTEL
1. Introduction
Ratio analysis facilitates in carrying out financial analysis of an organization that
facilitates in determining the sustainable position of the company in the industry (Amran &
Aripin, 2015). The objective of the paper is to analyze the ratio analysis of The Langam Hotel of
Australia. Langam is positioned as a renowned hospitality and restaurant company all over
Australia that owns and invests in a portfolio of hotels with a primary focus on other restaurant
joints in Australia. All the hotels of the company are observed to be located in vibrant leisure and
commercial places in Australia and Hong Kong. Moreover, the horizontal trend analysis of the
selected ratios such as liquidity, solvency and profitability ratios are carried out in order to
evaluate financial risk, capital structure and profitability (Arkan, 2016).Moreover, the paper will
also consider analyzing the financial position of the company based on the ratio analysis focused
on which suitable recommendation will be provided.
2. Horizontal Ratio Analysis
2.1. Liquidity Ratio Analysis
2015 2016 2017
RATIO ANALYSIS
Liquidity
Current Ratio 0.21 0.12 0.09
Quick Ratio 0.15 0.05 0.05
Accounts Receivable Turnover (times) 3.29 0.96 2.46