ANALYSIS OF FINANCIAL PERFORMANCE OF HOTEL COMPANIES USING RATIO ANALYSIS
Keywords:
hotel company, ratio analysis, financial decision making, management, financial performances, improvementAbstract
Determining the competitiveness of companies in their sectors and assessing their financial performance are essential for monitoring and improving the sector. Comparisons with benchmarks and ratio numbers of similar companies are crucial for any type of financial analysis (horizontal, vertical and ratio analysis). The subject of this paper is the evaluation of the financial performance of hotel companies using ratio analysis (literature review and case study).
For the research in this paper, financial indicators were selected, which were calculated on the basis of data from financial statements on performance and financial position. Users of financial statements use the traditional balance sheet and income statement relationships to assess performance. Along with traditional indicators, cash flow from business activities is also important when assessing a company's performance and comparing them with competitors, the industry average in which the firm operates, and the like. Based on the results of the applied analysis, critical points in the business can be identified and corrective actions are taken. Financial ratios indicate the relationships between items disclosed in the financial statements, and are used to determine liquidity, solvency, profitability and efficiency.
Measuring financial performance is important because the financial and economic activities of companies are exposed to unfavourable, both internal and external factors. As a consequence of the action of these factors, the following can be mentioned: liquidity problems, rising costs, falling profitability, over-indebtedness and others. Therefore, financial analysis has a particularly important role in providing valid information on the performance of companies for a large number of users. The traditional financial ratio analysis is a popular follow-up view, but not only of the financial performance visible in the financial statements, but also of managerial performance since financial statements are a mirror of the work of managers entrusted with company resources.
The paper presents the financial analysis and diagnostics of the financial condition of the hotel company. The analysis of financial indicators occupies an important place in the accounting and financial literature, and is often presented through case studies, which is the case here as well.
The paper presents financial analysis and diagnostics of the financial condition of the company using a technique known as financial ratio analysis. This research measures the financial performance of the hotel company "Palisad Zlatibor" by using 20 financial ratios. Based on the obtained results, a financial diagnosis was made, and recommendations were given for improving the performance of the observed company.
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