MORGANS HOTEL GROUP

Morgans Hotel Group

Executive Summary

In order to understand the value of company, investors and other stakeholders analyze financial statements of company. The analysis of financial statements highlights the areas which are required for further improvement and also highlights the strength of the company. Management of company with the help of ratios identify trend of company financial performance and compare this performance with competitors and with industry. Managers usually study main ratios that highlight complete financial health of the company with respect of profitability, efficiency, liquidity, debt management and investment of the company. In the paper, the financial analysis of Morgans Hotel Group has been done using financial ratio techniques. Financial Analysis of Morgans Hotel Group shows that company is not performing in with industry trend. Ratio analysis indicates that group's profitability has been reducing along with efficiency. As far as liquidity and debt management is concern, MHG is performing better than industry. MHG aim is different i.e. they want to create long term relation with their investors. They have stress out in their financial performance but in future they would be improving their entire position. MHG have made huge investment during 2012 due to which they have net losses and also negative value for retain earning.

EXECUTIVE SUMMARYII

MORGANS HOTEL GROUP1

INTRODUCTION1

THE IMPORTANCE OF THIS FINANCIAL DATA TO THE MANAGEMENT OF THESE BUSINESSES1

BRIEF BACKGROUND OF THE COMPANY - MORGANS HOTEL GROUP2

COMPARISON OF FINANCIAL DATA3

Return on Equity3

Return on Assets5

Profit Margin6

Assets turnover7

Debt-To-Equity Ratio7

Current Ratio8

Occupancy Rate8

REVPAR9

CONCLUSION10

REFERENCE11

APPENDIX15

Morgans Hotel Group

Introduction

Without analyzing financial data of the company, business owners are just flying in the air. No matter whether it interests the owner or not, it is essential for them to at least understand. Hence, to know the financial position of the company, one needs to analyze their financial statement through different techniques suggested by researchers. The objective of this paper would be on analyzing Morgans Hotel Group along with comparison with Dow Jones Industrial Average.

The importance of this financial data to the management of these businesses

Financial data provide financial position of the company to the business management. Management of companies needs this data in order to manage different affairs of the company which is only possible through reviewing financial performance as well as financial position. With this, they are able to take important business decisions. The most important technique that is usually utilized by companies is Financial Ratio Analysis. Upper management view on ratio analysis is quite different. The importance of ratios to management is that they can measure their company progress against per-determined internal objectives, with direct competitors and also with industry (Gibson, 2010, p. 95).

Addition to this, management is also able to track trend through identifying the area where company has been performing well and where improvement is needed. In short, financial statistic could easily be compared by employing different ratios. Business management is usually concern with small set of ratios that highlights complete performance of the company i.e. profitability, efficiency, liquidity, debt management and investment of the ...