FINANCIAL MANAGEMENT

Financial Management



Table Of Content

PART A) ROYAL OAK HOTEL (BETWS - Y - COED) LIMITED1

OVERVIEW OF THE COMPANY - ROYAL OAK HOTEL (BETWS-Y -COED) LIMITED1

Services by Royal Oak Hotel (Betws-Y -Coed) Limited1

Financial highlights of Royal Oak Hotel (Betws-Y -Coed) Limited1

FINANCIAL ANALYSIS 2010-20112

Liquidity Ratios - Low - Appendix for calculation2

Efficiency Ratios Appendix for calculation3

Profitability Ratios Appendix for calculation4

Debt Ratios Appendix for calculation6

Market Ratios - Appendix for calculation7

ANALYSIS OF THE FINANCIAL RATIOS - INVESTORS PERSPECTIVE7

RECOMMENDATIONS FOR ROYAL OAK HOTEL8

CONCLUSION10

PART B) PRESENT FINANCIAL DIFFICULTIES ON INTERNATIONAL TOURISM11

INTRODUCTION11

DISCUSSION11

Present Economic Difficulties in International Tourism11

The dynamic growth of international tourism expenditure with BRICs13

Increase in revenue - Growing and Developed Economies13

GLOBAL TOURISM AND THE PROBLEMS OF THE HIGH DEMAND14

CHALLENGES AND PROBLEMS FACED BY INTERNATIONAL TOURISM15

The main problems of international tourism16

CONCLUSION19

REFERENCES20

APPENDIX22

Financial Management

Part A) Royal Oak Hotel (Betws - Y - Coed) Limited

Overview of the Company - Royal Oak Hotel (Betws-Y -Coed) Limited

Royal Oak Hotel is a Private limited with Share Capital founded in 1972. This company has only 5 shareholders along with a sole subsidiary. The company headquartered in Gwynedd UK.

Services by Royal Oak Hotel (Betws-Y -Coed) Limited

The Royal Oak Hotel deliberately situated surrounded by straightforward reach of the outdoor leisure venues of the Snowdonia Mountain range along with stunning beaches. The Snowdonia National Park is near to this hotel where guest can benefited from ice climbing and rafting. It is located in the centre of the Betws-y-Coed village in North Wales which lay guest to enjoy the River Llugwy along with the historic castles. Leisure centre can also be visited by guests. This hotel also offers in-door facilities of swimming pool and the spa in order to attract more guests (www.duedil.com).

Financial highlights of Royal Oak Hotel (Betws-Y -Coed) Limited

In 2011, company has reported £407,914 of net income which was a decline from last year 2010£616,294. The operating profit was £528,495 in 2011 while it was £828,464 which is also a decline. In 2012, the turnover is increasing from last year performance from 4,785,414 GBP to 4,872,813 GBP i.e. 1.83% increased from last year (2011). Current performance is far better than 2011 performance as their main area of the operation has been increasing. In 2011, company book value has been increase from 3,312,510 GBP to 3,585,184 GBP i.e. 8.23%. In 2011, company sales has adversely reduce from 2010 and company cash on hand was 88.5% less than what they has in 2010. Nevertheless, the current 2012 situation has been improved. But in this paper, the focus will be on 2010 to 2011 for making investment decision (www.duedil.com).

Financial Analysis 2010-2011

In order to evaluate company from financial perspective, the approach that has been selected is Ratio analysis over two years period. This ratio analysis will present a clear picture of company's trend regarding their liquidity, profitability, efficiency performance, Debt Management, Asset management and Investor Ratios.

Liquidity Ratios - Low - Appendix for calculation

Liquidity Ratios

2010

2011

Current Ratio = Current Assets/Current Liabilities

0.13584

0.12229

Quick ratio =(Current assets - Inventories)/Current Liabilities)

0.09923

0.08403

Cash Ratio = Cash + Cash Equivalents/Current ...