Aim of the Assessment / Research Question
Analyse and interpret financial statement information (for example as of 31Dec2020) to evaluate the hospitality firm’s performance and compare it with the previous year’s figures (before COVID-19 outbreak) and compare the figures with a key competitor, the benchmark company, it wishes to emulate. Identify aspects of the financial statements to extract value from it and predict if the hospitality firm is diversified and resilient and earns profits also during difficult times and will further develop to become a champion of the hospitality sector and have higher earnings than the benchmark in the future as well. This report will draw on further multiple financial accounting topics and data from annual reports/financial statement information and will require you to perform financial ratios tests, formula calculations, indicate implications and conclusions, how to improve the hospitality firm’s performance, indicate the possibility of a critical problem to repay debt, in case the firm is not financed in a conservative way, or provide recommendations how to secure future earnings and dividends for the (share-)owners. Major relevant hospitality industry ratios to be used include cash (liquidity), debt levels, inventory, asset management, hotel room sales (revenues), profitability and market ratios. The analysis has to include financial ratios tests and comparisons with the selected benchmark. Finally, a critical evaluation and prediction of future financial results of the selected company, with a summary, early warning signals and flagging of ringing bells or potential problems, or lack of future profit sustainability is required. Conclusions and implications for a (better) future or at least to avoid financial deterioration of the selected company needs to be added as well. Make sure that the selected company is from the hospitality/lodging, restaurant or cruise-ship/tourism sector.
Assessed Learning Outcomes
1. Interpret financial statements to evaluate the overall performance of the hospitality firm and compare it with a benchmark company, based on more than one single ratio.
Assessment Brief
Objectives
1. Report created is at an appropriate level of detail and takes into account all aspects of the accounting data or financial statement analysis. Relevant ratios for the hospitality industry have to be used.
2. Written communication is logically arranged and easy to decipher enabling the reader to understand the relevant information easily.
3. Provide advanced interpretations of the financial ratios tests and comparisons with the benchmark companies (peers). Appropriate critical evaluations, conclusions and implications for a (better) future of the selected company.
Structure and Content of the Group Report
Your Pair-work Report must include all the following sections in the given order:
1. Cover Page The cover page must include:
1.1. The module code and title
1.2. The assessment title
1.3. Your RGU Student ID
1.4. Your name (first name followed by last name)
2. Table of Contents
3. Executive Summary
3.1. States the aim of the report, the research objectives sought, may be to solve a problem.
3.2. Outlines briefly the contents of subsequent sections
4. Theoretical Background
4.1. Shows a clear understanding of the financial stability of a hospitality firm.
5. Data Collection and Measures
5.1. User relies for example on data from the firms’ annual reports as of 31Dec2020, or as of 31Dec2019 (cash, debt, interest costs, revenue, profit, profitability etc..)
5.2. Outlines the measurement of the various relevant financial ratios tests for the hospitality industry.
5.3. Provides the same ratios for the benchmark company (peers).
6. Key Results
6.1. Critical evaluation of the main financial ratios tests (possibility of a problem or isolate the cause of the problem) after the comparison with the benchmark.
6.2. Discusses the implications, the summary of the major ratios of the chosen hospitality firm.
7. Implications and Recommendations
7.1. Confirms the financial stability/the possibility of a problem of the (hospitality) firm.
7.2. Acknowledges the suitability/cause of the problem of the (hospitality) firm.
7.3. Indicates how the hospitality firm can solve the problem, how earnings can be improved in the future, and how it can become the champion of its sector (implications and recommendations).
8. References. List all references you used in your preparation of the project including the preliminary literature review. All references must follow the Harvard RGU referencing system.
Minimal Number of References on the list: 20 (thereof 5 academic, theoretical references)
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