Analysis of the importance of financial performances and comparison of financial ratios of Chancellors Hotel with another business in the same industry and industry averages

The Report below is about analysis of the importance of the financial ratios of the Chancellors Hotel and Conference Centre. Hotel is owned by The University of Manchester and it is located in Fallowfield, Manchester, United Kingdom. Ratio analysis helps to identify problem areas and opportunities within the business. Report includes explanations of the most important financial ratios, such as Profitability Ratios, Liquidity Ratios and Working Capital Management Ratios. To see how well Chancellors Hotel operates, it is compared with another business and with Average Industry ratios. Moreover, report includes areas of good and bad practice. In conclusions are given recommendations on how to improve performance of the Hotel.

Executive summary 2
Introduction 4
Main Body 4
Profitability ratios 4
Gross profit ratio 5
Net profit ratio 5
Return on Capital Employed 5
Liquidity ratios 5
Current ratio 6
Acid Test ratio 6
Working Capital Management Ratios 6
Stock Turnover Days 7
Debtor Collection Days 7
Creditor Payment Period 7
Comparison of the Financial Ratios 7
Conclusions and recommendations 9
References: 10