Report (2000 words)
As an independent Accounting consultant, you are to prepare a financial analysis report of two companies, Hyatt and Marriott. Your report should cover all of the criteria listed below, demonstrating your understanding of the skills and techniques used to analyse financial reports. The report will make appropriate critical observations and recommendations for presentation to management. Refer to the most recent financial statements of the Company Annual Report.
Prepare a Financial Analysis Report - comprising:
a. Executive Summary - provide a concise (1 page maximum) summary of the two businesses, including financial position, financial performance and recommendations. Please refer to CALS.
b. Introduction - provide a brief (1 page maximum) introduction to your report including a concise summary of the businesses history, strategy and activities as key background/context to your review. Provide key data to summarise hotel group such as number of hotels, geographic spread, a brief history, markets, brands, strategy and plans. Please refer to CALS.
c. Review of Financial/Operating Results- covering Income Statements of the businesses over the latest 3-year period. You will review the performance of the businesses using trend, ratio and industry benchmark analysis. Your review will satisfy the key question of how the businesses have been performing by addressing the sales, costs, expenses and profitability of the comparative businesses.
d. Review of Financial Position - covering Balance Sheets of the businesses over the latest 3-year period. You will review the financial position of the businesses using trend, ratio and industry benchmark analysis. Your review will satisfy the key question of how strong are the financial position of your businesses by addressing assets, liabilities, owner's equity, liquidity and solvency of the comparative businesses.
e. Conclusions, Observations and Recommendations - comment on the business strategies, highlight financial areas of concern and opportunity, recommendations for future attention by management. Identify specific concerns or possible areas of management improvement, for example, liquidity, solvency, profitability, expense control, equity, occupancy, room rates, REVPAR etc. A key concluding recommendation is whether you believe the businesses represent a good investment to buy, sell or hold.
Report Format and Analysis Techniques:
1. Professional layout and presentation, which is concise, informative and correctly referenced with evidence of employing high quality research. Graphs and colour can assist in summarising key points in your report.
2. Effective use of ratio, trend and benchmark analysis techniques.
3. Clear and concise analysis of the financial statements rather than simply analysing movements, that is, no up or down "elevator analysis". Key to effective analysis is to explain why there has been a movement - what caused it?