Crystal Hotel Pty Ltd is a privately owned 3.5 stars hotel located in Parramatta CBD in Sydney

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Subject Code and Title		BIZ201 Accounting for Decision Making
Assessment		Case Study Part A
Individual/Group		Individual
Length		1500 words
Learning Outcomes		b)  Apply relevant accounting concepts to simple
	business scenarios.
		c)  Interpret and analyse the information contained
		in general purpose financial statements, to
		evaluate the overall financial position and
		performance of a business.
Submission		By 11:55 pm AEST/AEDT Sunday of Module 4 (Week 8)
Weighting		30%
Total Marks		100 marks

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

BIZ201_Assessment 3 Brief_M3_Case Study                                                                                       Page 1 of 10

Crystal Hotel Case Study

Crystal Hotel Pty Ltd is a privately owned 3.5 stars hotel located in Parramatta CBD 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hotel is located in a very popular location and close proximity to a river and the city centre, it is becoming quite outdated. 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 Excel workbook and then use your findings in creating a business report to be submitted to the client.

BIZ201_Assessment 3 Brief_M3_Case Study                                                                                       Page 2 of 10

Required:

Part 1 – to be done in Excel Workbook

This Excel Workbook is available on Blackboard under assessment section. Download it, perform calculations on it and submit it.

1. Vertical analysis of financial statements:

1. Conduct Vertical Analysis of Crystal Hotel’s Statement of Financial Position as at 30 June 2018 using the Vertical Analysis SOFP Round your numerical answers to two decimal places.

1. Conduct Vertical Analysis of Crystal Hotel’s Statement of Profit and Loss for the year ended 30 June 2018 using Vertical Analysis P&L Round your numerical answers to two decimal places.

2. Conduct Ratio Analysis using Ratio Analysis Round your numerical answers to two decimal places.

Part 2 – to be included in the 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 comparing to the industry.

Include comments on Revenue, Cost of sales unallocated Operating costs and Total costs

(excluding personnel costs), Personnel 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.

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