BIZ201 Accounting for Decision Making

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Context:
This assessment is aimed at consolidating knowledge from Modules 1-3. By prescribing this
assessment, you are able to reflect on the understanding of accounting concepts and be
able to apply them to business scenarios like given in this case study.
Instructions:
1. The case study below presents a business scenario. Answer questions in Part 1 and 2 at
the end of this case study.
2. Submit two files; Excel Workbook and the Business Report.
3. For calculation questions show all workings through appropriate Excel formulas. Copy
pasted numbers without appropriate Excel formulas will not be accepted.
4. Submit your assessment files using the following naming convention:
First Name_Last Name_BIZ201_Case_Study A_Assessment3_Workbook.xlsx
First Name_Last Name_BIZ201_Case_Study A_Assessment3_Report.doc
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Crystal Hotel Pty Ltd is a privately owned 3.5 stars hotel located in Sydney. The Hotel consists of
160 rooms with maximum capacity of 350 guests, a restaurant with capacity of 150 guests, a
function room with maximum capacity of 250 guests and a conference room with maximum
capacity of 200 guests. The average price per room per night is $150.
While the hotel is located in a very popular location, close proximity to a river and in the city
centre, it is becoming quite out-dated. The owners rely heavily on their corporate clientele. Clients
usually use the hotel for their expat employees. Due to long-term contracts, they pay on credit
with invoices being issued at the end of each month. The hotel is often faced with outstanding
invoices. The owners have so far tolerated it as it usually occurs with their long-term clients.
Additionally, to the accommodation services, they often use hotel facilities for their functions and
conferences.
The hotel is constantly having difficulties retaining a good quality staff as they always get junior
personnel, which once gaining experience will usually leave for better opportunities in hotels with
higher ratings. The biggest issue is to retain high quality personnel in the hotel restaurant, especially
a chef.
The owners would like to increase the hotel star rating by renovating or refurbishing the hotel and
improving their services. They are thinking about building a Wellness Centre on the rooftop of the
hotel, which would include a massage treatment room, gym, spa, sauna and an outdoor pool.
As new plans will require quite extensive capital investment, the owners
would like to know where they stand financially before making any
major decisions. You have been appointed to analyse their financial
statements and to give them an insight on which areas should be
improved and analysed further.
You are expected to conduct the financial statement analysis in an Excel
workbook and then use your findings in creating a business report to be
submitted to the client.
Crystal Hotel Case Study
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Part 1 – Excel Workbook Calculations
This Excel Workbook is available on learning portal under assessment section. You will find 6
worksheets within the file. The first 3 contain financial information about the hotel. The final 3
worksheets are for you to complete calculations. All answers to be rounded to 2 decimal places.
You must submit the completed Excel Workbook, Business Report and presentation materials.
1. Vertical Analysis:
a. Conduct a Vertical Analysis of Crystal Hotel’s Statement of Profit and Loss for the
year ended 30 June 2018 using Vertical Analysis P&L worksheet.
b. Conduct a Vertical Analysis of Crystal Hotel’s Statement of Financial Position as at
30 June 2018 using the Vertical Analysis SOFP worksheet.
2. Ratio Analysis:
Conduct a Ratio Analysis using Ratio Analysis worksheet.
Part 2 – Business Report
3. Using the Income Statement Vertical Analysis prepared in Excel workbook, conduct Income
Statement comparative analysis to the industry benchmarks included in Table 1 and Table 2
of the Appendix.
Comment on:
• How the business is performing compared to industry
• Revenue
• Cost of sales
• Personnel costs
• Unallocated Operating costs and
• Total costs proportions
Make recommendations on areas that need improvements or further investigation, based
on the results of your comparative analysis.
4. Using the results of the Ratio Analysis in Excel workbook, comment on Profitability,
Efficiency, Liquidity and Solvency of the business. With reference to the industry data
provided, make recommendations where appropriate.
5. There are additional industry specific performance indicators and benchmarks that the hotel
could use when comparing itself to the industry. Conduct a research and recommend 3
additional industry specific benchmarks the hotel could use in their comparative analysis.
Include a brief explanation of each benchmark you are recommending including formula
where appropriate.
See the Report Format section for guidance on the report structure.
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Part 3 – Presentation
In this section you must communicate by presenting your findings to the owners. Prepare a short 5-10 minute
summary of the main findings of your report. It should specifically focus on:
• Your analysis of the current financial status of the hotel
• Your recommendations for the hotel based on your financial analysis
As the future of the hotel is at stake, the owners are likely to ask questions about your analysis and
recommendations. Ensure that you are prepared to defend your arguments and address any concerns.
Although the financial calculations and business report are individual items, if you have reached similar
conclusions, you may undertake this section of the assessment in pairs.
Face to Face On-campus Students
This section of the assessment will take place in class in Week 10 of the trimester. Failure to attend will result
in ‘0’ grade for this section of the assessment.
Online Students
This section of the assessment will take place during Week 10 of the trimester via a synchronous online session
with your Facilitator. You may also submit this section via a pre-recorded video. Failure to attend will result in
‘0’ grade for this section of the assessment.
Submission Instructions
All students must submit via the learning portal the following:
• Completed Excel Workbook containing calculations
• Business Report
• Presentation materials e.g. PowerPoint Slides
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Report Format
As this is a business report, the following sections and headings should be included in your write up:
➢ Title Page – including subject name, assessment title, date, your details (student name, ID)
➢ Executive Summary – An executive summary provides a succinct summary of the content within the
report. It presents information in such a way that readers are able to understand the intention and key
elements of the report without having to read the entire document. This section is not included in the
word count and will be approximately 300 words long.
➢ Table of Contents – A summary of the sections and pages numbers
➢ Introduction – The introduction sets the scene and provides context for the aim. It provides background to
the issues being addressed only. (Approximately 10% of word count)
➢ Main Discussion – (Rename the headings/sub-headings to reflect your report). This section should
provide information regarding the analysis you undertook addressing the key deliverables i.e. Part 2
➢ Conclusion – The conclusion restates the aim then provides a brief and concise summary of the discussion
to demonstrate that the aim of the report has been achieved. No new information is to be included in the
conclusion. (Approximately 10% of word count)
➢ References – Please use the correct APA referencing style and list in alphabetical order. It is recommended
that you use reference management software such as EndNote or Mendeley to make the job of
referencing simple and straightforward. Remember, every factual statement in your report will require a
reference. Please see the marking rubric at the end of this document for a guide to how many references
you should be including in this report.
Need to brush up on your referencing? See here for some examples – TUA referencing guide (you must be
logged into the learning portal)
➢ Appendices – This is where you provide supporting material which is unsuitable for inclusion in the body
of the report, but still has some value to contribute to the report. Note – if you have included an
Appendices section in your report, you must mention them in the main body.
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Appendix – Industry Data
Table 1 Vertical Analysis of Statement of Profit and Loss based on Number of Rooms
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Table 2 Vertical Analysis of Statement of Profit and Loss based on Average Room Price Range
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Marking Rubric: Assessment 3

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