To produce an informal report Assignment Example | Topics and Well Written Essays - 1000 words

To produce an informal report - Assignment ExampleROCE also increase to 24% in 2011 as compare to 20% in 2010 cod to increase in net income and shareholders equity and decrease in long end point debt.Current dimension increased from 1.39 to 1.67 mainly due to decrease in current liabilities particularly bank overdraft by 4000 during 2011 and increase in inventory by 2000 during the year. Acid test ratio also increased from 1.25 to 1.42 in 2011 due to decrease in current liabilities by 2000 and increase in current assets by 1300 during 2011. Stock turnover fall from 20 in 2010 to 17 in 2011 due to increase in cost of goods sold and inventory, which highlights the hotels efficiency in managing its inventory and avoiding under stocking quite we could conclude that hotel is experiencing higher sales than the previous year. Debtor collection period decreased from 48 days in 2010 to 41 days in 2011 due to application of robust collection policies. Creditors payment period decreased fr om 16 days to 15 days during 2011 is mainly due to increase in payables. cracking gearing ratio decreased from 16% to 11.5% in 2011 is due to increase in shareholders equity and decrease in long term debt, which is considered good as it signifies the hotel dependence more on equity financing as compare to debt financing thus it lessens the risk of interest rate sum and other related fixed costs but it whitethorn also heightened the monetary risk due to higher volatility in profits.As per the financial ratio analysis for the year 2010 and 2011, it is clear that Hotel is enjoying a marvelous growth in terms of sales both from rooms and other restaurant functions. However, hotel needfully to control the cost of goods in order to improve the gross profit margin for the up coming years and other operating expenses.In addition, hotel may also have to look upon its payment patterns and improvise the payment period to suppliers and creditors for the goods bought on credit by paying off e arly. In order to flash back the financial risk