A ssessment Brief
Program Bachelor of Business
Subject code ACC101A
Subject name Introduction to Business Accounting
Assessment title Assessment – Case Study Part A
Group or individual assessment Individual
Length 1,500 words maximum (not including tables)
Learning outcomes addressed • Identify and apply relevant accounting concepts to simple business scenarios
• Interpret the information contained in general purpose financial statements, its usefulness to various user groups and in business decision making
Submission date Week 7
Total marks 85 Marks
1. This assignment must be prepared and submitted individually, the work you submit must be your own.
2. 2 files have to be submitted, Excel Worksheet together with the Business Report
3. You should include a reference list for any textbooks, websites or other references you use to prepare your answers. Apart from the reference list at the end of the report, use in text referencing whenever appropriate.
4. For all questions you are required to show all workings. When calculating in Excel, appropriate Excel formulas will need to be shown. Copy pasted numbers with no workings provided are not acceptable.
5. Unless otherwise instructed, round your numerical answers to two decimal places.
6. Submit your assessment files using the following naming convention:
First Name_LastName_ACC101A_Case_Study A_Assessment_ Workbook.xlsx First Name_LastName_ACC101A_ Case_ Study A_Assessment_Report.doc
Rose Garden Hotel Pty Ltd is a privately owned 3.5 stars hotel located in Fortitude Valley in Brisbane. 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 $148.
While the hotel is located in a very popular location and close proximity to the Brisbane River and 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 a 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 and then use your findings in creating a business report to be submitted to the client.
PART 1 – to be done in Excel
1. Conduct Vertical Analysis of the Rose Garden Hotel Balance Sheet as at 30 June 2016 using the Case Study Excel Workbook – Vertical Analysis Balance Sheet worksheet.
2. Conduct Vertical Analysis of the Rose Garden Hotel Income Statement for the year ending 30 June 2016 using - Vertical Analysis Income Statement worksheet.
3. Conduct Ratio Analysis using Ratio Analysis worksheet.
PART 2 – to be included in the Business report
4. Using the Income Statement Vertical Analysis prepared in Excel, conduct Income Statement comparative analysis to the industry benchmarks included in Table 1 and Table 2 of the Appendix. As 2016 figures have not been published yet, conduct the comparison to the industry values from 2015.
Comment on how the business is performing comparing to the industry.
Include comments on Revenue, Cost of sales (excluding personnel costs), Personnel costs, unallocated Operating Costs and Total Costs proportions.
Based on the results of your comparative analysis, make recommendations on areas needing an improvement or further investigation.
5. Using the results of the Ratio Analysis in Excel, comment on Profitability, Efficiency, Liquidity and Solvency of the business. With reference to the industry data provided, make recommendations when appropriate.
6. 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 formulas when appropriate.
Appendix – Industry Data
Table 1 Profit and Loss per Number of Rooms
Table 2 Profit and Loss based on average Room Price Range
Part 1 Excel Calculations Maximum Marks
1. Vertical Analysis Balance Sheet Worksheet Students are expected to choose appropriate basis and convert every item on the Balance Sheet into appropriate % value. 8
2. Vertical Analysis Income Statement Worksheet Students are expected to choose appropriate basis and convert every item on the Incomet Statement into appropriate % value. 10
3. Ratio Analysis Worksheet Students should use excel formulas and relevant worksheets to calculate appropriate ratios. 1 Mark is allocated for each correct ratio 14
Part 2 Business Report
4. Income Statement Comparative Analysis Students are expected to use the Income Statement Vertical Analysis they prepared in Excel and compare it to the industry values provided in the Appendix. Students should include comments on Revenue, Cost of sales, Personnel costs, Unallocated Operating Costs and Total Costs proportions. 4 Marks are allocated for each section. 20
5. Ratio analysis comments Students are expected to use data prepared in Excel under Ratio analysis and comment on
Profitability,Efficiency, Liquidity and Solvency of the business. Comments should include reference to the industry data provided. 5 Marks are allocated for each main group of ratios. 20
6. Industry Specific Performance Indicators Students are expected to do their own research and provide examples of three industry specific benchmarks the hotel could use for further comparative analysis. Students should provide explanation of each benchmark including formulas when appropriate. 3 Marks are allocated for each appropriate benchmark. 9
Overall Strucure and appearance of the Business Report Overall structure, apperanace and referencing of the report will be assessed. 4
Total Marks 85