Hotel Financial Analysis - 989 Words

Waterfront Mactan Casino Hotel, Inc. (WMCHI) ANALYSIS OF FINANCIAL PERFORMANCE Profitability Analysis 2008 0.084266313 0.046495453 0.009816935 0.027953925 2007 0.115098173 0.042234313 0.018062622 0.054801237 Profitability Analysis Return on sales Return On Assets Return On Equity WMCHI’s net income for 2008 improved by .004 points, but reflected a 50% decline on its ability to use its assets as a source of revenue. Moreover, because of the company’s heavy reliance on borrowings from financial institutions to support its expansion, the return on their stockholder’s equity also went down by more than 50% of 2007’s figures. We can surmise that the company’s operating profit is not sufficient to give its shareholders a satisfying level†¦show more content†¦Leverage (Solvency) Analysis 2008 16.14179017 1.67463848 0.597143809 0.373882305 0.626117695 2.020035627 0.755255577 9.807110321 0.287606355 2007 17.42714207 2.033957962 0.491652246 0.329602457 0.670397543 2.24505446 0.739975467 10.33676611 0.57973583 Solvency Analysis Debt / Equity Ratio Equity / Debt Ratio Propriety (Equity) Ratio Debt Ratio Fixed Assets To Owners Equity Fixed Assets To Total Equity Total Long-term Liabilities Coverage Plant Turnover Assessing WMCHI’s ability to handle maturing debts or loan obligations through their internal financial strength, we notice a strong reliance on borrowed money rather on operating income. Although the margin of safety which provides creditors peace of mind only increased by 11 points in 2008, we can deduce that this improvement will somehow affect the level of shareholder income, i.e., the cash generated from operations might be spent for debt payment. Loans from creditors of WMCHI cover more than 60% of the company’s total assets. Though the exposure of shareholder equity on the company’s total assets continue to be less than 40% of the value of the company’s total assets, we notice a 4% increase in 2008 figures. Remember that we earlier remarked that theShow MoreRelatedA financial analysis on NH-hotels2469 Words   |  10 PagesEXECUTIVE SUMMARY This report is a financial analysis of the NH Hoteles hotel company from the viewpoint of financial analysts wishing to purchase shares in the hospitability-leisure business. 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