Financial Management and Ratio Analysis Report: Gatsby Grange

This report provides a detailed analysis of the financial management practices of Gatsby Grange, a small chain of boutique hotels. The report focuses on various financial ratios, including liquidity, profitability, and gearing ratios, to assess the company's financial health. The analysis includes the calculation and interpretation of these ratios, highlighting their significance in understanding the company's performance and financial risk. The report also discusses the importance of ratio analysis, and its limitations, offering insights into the company's ability to manage its finances effectively. The conclusion suggests strategies for the leadership of Gatsby Grange to improve financial assets and optimize the liquidity condition, aiming to minimize costs and enhance overall financial performance. The report also provides references to support the analysis.

TASK 2
Financial Management In Hospitality
Industry

TABLE OF CONTENT
 Introduction
 Brief overview of report
 Conclusion
 References

INTRODUCTION
Financial management is described as interacting with and evaluating money
and property for an individual or a corporation in order to help make
management decisions. In the hospitality industry, financial management
includes: developing a yearly budget; developing a comprehensive
financial monitoring model; providing security reviews; and developing a
reporting system that enables administrators maintain a P&L knowledge
tab. This report based on the Gatsby Grange is a part of small chain of
Boutique within the Northern Ireland and United Kingdom.

BRIEF OVERVIEW OF REPORT
The key part of the analysis focuses on the calculation and examination of
ratios by the Gatsby Grange company. During the first research feature,
three types of ratios are calculated and defined, as these are the
efficiency ratio, the financial leverage and the gearing ratio. In addition
to do appropriate ratio analysis, unique types of analyses have been used
to more reliably display financial performance. In relation to this feature,
information about the importance and deficiency of ratio study is
discussed.

CONTINUE…
 In this report calculate different types of ratios to analysis the actual position
of the business and take right decision in regard of future investments. These
ratios are increasing the efficiency of the business. There are discussed
different ratios that mentioned in the report such as:
 Liquidity ratio: Liquidity ratios are calculated to measure a company's
ability to pay off all its short-term commitments once they are attributable.
In other terms, the capital account of the company or the ability to turn its
current assets into cash is referred to as liquidity to compensate off its debt
payments, and the formulas that quantify it are referred to as liquidity ratios.

CONTINUE…
 Profitability ratio: The business success on profit margins is reasonable.
It is likely since ratios offer a particular result. This is important here to
note that the business success was better in 2018, but fell next year in
2019.
 Gearing ratio: The gearing ratio includes the calculation of the customer
deposits of a business to its equity. The ratio shows the financial danger
to which an undertaking is exposed, because excessive debt will result
money problems.

CONCLUSION
 A high gearing ratio is symbolic of a significant amount of borrowing, in
which a corporation uses loans to pay for its ongoing activities.
 It could be suggested to the leadership and owner of Gatsby Grange on
the basis of the above-mentioned premise that they aim to minimize
overall costs because they are unable to achieve maximum total revenue
and gross margin due to increased expenditure levels. The financial
management of the company will focus on raising the amount of
financial assets in attempt to optimize the liquidity condition.

REFERENCES
 Jones, C., Finkler, S.A., Kovner, C.T. and Mose, J., 2018. Financial
Management for Nurse Managers and Executives-E-Book. Elsevier
Health Sciences.
 Hatefi, M.A., 2019. Indifference threshold-based attribute ratio analysis:
A method for assigning the weights to the attributes in multiple attribute
decision making. Applied Soft Computing, 74, pp.643-651.