BIZ201 Accounting for Decision Making – Crystal Hotel

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BIZ201 Accounting for Decision Making- Crystal Hotel

Crystal Hotel Pty Ltd financial statements analysis

Introduction
One important method to scrutinize financial presentations is to conduct a vertical
analysis of the presentations. This kind of analysis assists a manager in knowing the
performance of different departments in an organization (Atrill, 2009). On the other hand,
ratio analysis in finance assists administrators to come up with important decisions that
enhance growth and development of a company. In most times, profitability ratios, solvency,
liquidity and efficiency ratios are normally used to measure the different performance of
industry compared to the set standard of the business (McLaney and Atrill, 2012). This report
majorly analyses the financial performance of Crystal Hotel Pty limited using the vertical
analysis of profit and loss account, vertical analysis of the balance sheet and ratio analysis.

Category:

Description

ASSESSMENT BRIEF

Subject Code and Title BIZ201 Accounting for Decision Making
Assessment Case Study Part A
Individual/Group Individual
Length 1,500 words
Learning Outcomes b) Apply relevant accounting concepts to simple

business scenarios.
c) Interpret and analyse the information contained
in general purpose financial statements, to
evaluate the overall financial position and
performance of a business.

Weighting 30%
Total Marks 100 marks

Context:
This assessment is aimed at consolidating knowledge from Modules 1-3. By prescribing this
assessment, you are able to reflect on your understanding of accounting concepts and be
able to apply them to business scenarios like given in this case study. BIZ201 Accounting for Decision Making- Crystal Hotel.

Instructions:
1. This assignment must be prepared and submitted individually, the work you submit
must be your own.
2. Two 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. BIZ201 Accounting for Decision Making- Crystal Hotel.
5. Unless otherwise instructed, round your numerical answers to two decimal places.
6. Submit your assessment files using the following naming convention:
First Name_Last Name_BIZ201_Case_Study A_Assessment3_Workbook.xlsx
First Name_Last Name_BIZ201_Case_Study A_Assessment3_Report.doc

BIZ201_Assessment 3 Brief_M3_Case Study Page 2 of 10
Crystal Hotel Pty Ltd is a privately owned 3.5 stars hotel located in Paramatta CBD in Sydney. 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. BIZ201 Accounting for Decision Making- Crystal Hotel.
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. BIZ201 Accounting for Decision Making- Crystal Hotel.
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 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. BIZ201 Accounting for Decision Making- Crystal Hotel.
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. BIZ201 Accounting for Decision Making- Crystal Hotel.

Crystal Hotel Case Study

BIZ201_Assessment 3 Brief_M3_Case Study Page 3 of 10
REQUIRED:
PART 1 – to be done in Excel
1. Vertical analysis of financial statements:
a. Conduct Vertical Analysis of the Crystal Hotel Balance Sheet using the Case Study
Excel Workbook. The workbook is attached under Assessment Information section
(AU – Crystal Hotel Case Study Workbook Part A student.xlsx). Open the Vertical
Analysis Balance Sheet worksheet. BIZ201 Accounting for Decision Making- Crystal Hotel.
b. Conduct Vertical Analysis of the Crystal Hotel Income Statement for the year ending
30 June 2015 using – Vertical Analysis Income Statement worksheet of the same
workbook (AU – Crystal Hotel Case Study Workbook Part A student.xlsx).

2. Conduct Ratio Analysis using Ratio Analysis worksheet of the same workbook (AU – Crystal
Hotel Case Study Workbook Part A student.xlsx). BIZ201 Accounting for Decision Making- Crystal Hotel.

PART 2 – to be included in the Business report
3. 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. BIZ201 Accounting for Decision Making- Crystal Hotel.
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.
4. 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.
5. 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. BIZ201 Accounting for Decision Making- Crystal Hotel.

BIZ201_Assessment 3 Brief_M3_Case Study Page 4 of 10
Appendix – Industry Data
Table 1 Profit and Loss per Number of Rooms

BIZ201_Assessment 3 Brief_M3_Case Study Page 5 of 10
Table 2 Profit and Loss based on average Room Price Range

BIZ201_Assessment3 Brief_M3_Case Study Page 6 of 10
Learning Rubric: Assessment 3
Assessment
Attributes

Fail (Unacceptable)
(0-49)

Pass
(Functional)
(50-64)

Credit
(Proficient)
(65-74)

Distinction
(Advanced)
(75-84)

High Distinction
(Exceptional)
(85-100)

Grade
Description
(Grading Scheme)

Fail grade will be
awarded if a student is
unable to demonstrate
satisfactory academic
performance in the
subject or has failed to
complete required
assessment points in
accordance with the
subject’s required
assessment points.

Pass is awarded for work
showing a satisfactory
achievement of all
learning outcomes and
an adequate
understanding of theory
and application of skills.
A consistent academic
referencing system is
used and sources are
appropriately
acknowledged.

Credit is awarded for work
showing a more than
satisfactory achievement
of all learning outcomes
and a more than adequate
understanding of theory
and application of skills. A
consistent academic
referencing system is used
and sources are
appropriately
acknowledged.

Distinction is awarded
for work of superior
quality in achieving all
learning outcomes and a
superior integration and
understanding of theory
and application of skills.
Evidence of in-depth
research, reading,
analysis and evaluation is
demonstrated. A
consistent academic
referencing system is
used and sources are
appropriately
acknowledged.

High Distinction is
awarded for work of
outstanding quality in
achieving all learning
outcomes together with
outstanding integration
and understanding of
theory and application of
skills. Evidence of in‐
depth research, reading,
analysis, original and
creative thought is
demonstrated. A
consistent academic
referencing system is
used and sources are
appropriately
acknowledged.

Application of Vertical
analysis of financial
statements
SLO Addressed:
c) Interpret and
analyse the
information
contained in
general
purpose

Demonstrates no
application of vertical
analysis of Balance Sheet
and Income Statement.
Excel formulas are not
used for calculation.

Demonstrates limited
application of vertical
analysis of Balance Sheet
and Income Statement. Few
correct Excel formulas are
used for calculation.

Demonstrates consistent
application of vertical
analysis of Balance Sheet and
Income Statement. Not all
Excel formulas used for
calculation are correct.

Demonstrates an advanced
application of vertical
analysis of Balance Sheet
and Income Statement.
Most Excel formulas used
for calculation are correct.

Consistently demonstrates
an advanced application of
vertical analysis of Balance
Sheet and Income
Statement. All Excel
formulas used for
calculation are correct.

BIZ201_Assessment3 Brief_M3_Case Study Page 7 of 10
financial
statements, to
evaluate the
overall
financial
position and
performance
of a business.

22%
Calculation of
appropriate financial
ratios
SLO Addressed:
c) Interpret and
analyse the
information
contained in
general
purpose
financial
statements, to
evaluate the
overall
financial
position and
performance
of a business.
16%

Demonstrates no
evidence of use excel
formulas and relevant
worksheets to calculate
appropriate ratios.

Demonstrates limited
evidence of use excel
formulas and relevant
worksheets to calculate
appropriate ratios.

Demonstrates consistent
evidence of use excel
formulas and relevant
worksheets to calculate
appropriate ratios.

Demonstrates an advanced
evidence of use excel
formulas and relevant
worksheets to calculate
appropriate ratios.

Consistently demonstrates
an advanced evidence of
use excel formulas and
relevant worksheets to
calculate appropriate
ratios.

Comparison of Vertical
analysis of financial
statements calculations

No understanding of use
Vertical Analysis of
financial statements

Limited understanding of
use Vertical Analysis of
financial statements

Demonstrates consistent
understanding of use Vertical
Analysis of financial

Well demonstrated
understanding of use
Vertical Analysis of financial

Excellent demonstrated
understanding of use
Vertical Analysis of financial

BIZ201_Assessment3 Brief_M3_Case Study Page 8 of 10
with industry values
including comments on
various types of costs
SLO addressed:
b) Apply relevant
accounting
concepts to
simple
business
scenarios.
c) Interpret and
analyse the
information
contained in
general
purpose
financial
statements, to
evaluate the
overall
financial
position and
performance
of a business.

23%

calculations prepared in
Excel for comparison to
industry values provided
in the Appendix.
No comments on
Revenue, Cost of Sales,
Personnel Costs,
Unallocated Operating
Costs and Total Costs
proportions.

calculations prepared in
Excel for comparison to
industry values provided in
the Appendix.
Limited comments on
Revenue, Cost of Sales,
Personnel Costs,
Unallocated Operating
Costs and Total Costs
proportions.

statements calculations
prepared in Excel for
comparison to industry
values provided in the
Appendix.
Some comments on Revenue,
Cost of Sales, Personnel
Costs, Unallocated Operating
Costs and Total Costs
proportions.

statements calculations
prepared in Excel for
comparison to industry
values provided in the
Appendix.
Good comments on
Revenue, Cost of Sales,
Personnel Costs,
Unallocated Operating
Costs and Total Costs
proportions.

statements calculations
prepared in Excel for
comparison to industry
values provided in the
Appendix.
Well commented on
Revenue, Cost of Sales,
Personnel Costs,
Unallocated Operating
Costs and Total Costs
proportions.

Understanding of
Profitability, Efficiency,
Liquidity and Solvency
of the business using
ratio analysis with
reference to industry
data

No use of ratio analysis to
demonstrate the
understanding of
Profitability, Efficiency,
Liquidity and Solvency of
the business. No
reference to industry data
is provided.

Limited use of ratio analysis
to demonstrate the
understanding of
Profitability, Efficiency,
Liquidity and Solvency of
the business. Limited
comments were made with

Well-developed use of ratio
analysis to demonstrate the
understanding of
Profitability, Efficiency,
Liquidity and Solvency of the
business. Some comments
are made with reference to
industry data provided.

Thoroughly developed
understanding of
Profitability, Efficiency,
Liquidity and Solvency of
the business by using ratio
analysis. Good comments
were made with reference
to industry data provided.

Highly developed
understanding of
Profitability, Efficiency,
Liquidity and Solvency of
the business by using ratio
analysis. Recommendations
are clearly justified based

BIZ201_Assessment3 Brief_M3_Case Study Page 9 of 10
SLO addressed:
b) Apply relevant
accounting
concepts to
simple
business
scenarios.
c) Interpret and
analyse the
information
contained in
general
purpose
financial
statements, to
evaluate the
overall
financial
position and
performance
of a business.

23%

reference to industry data
provided.

on reference to industry
data provided.

Application of own
research to further
develop comparative
analysis of hotel
SLO addressed:
b) Apply relevant
accounting
concepts to
simple
business
scenarios.

No evidence of own
research to provide
examples of three
industry specific
benchmarks the hotel
could use for further
comparative analysis. No
explanation of any
benchmark including
formulas is provided.

Limited evidence of own
research to provide
examples of three industry
specific benchmarks the
hotel could use for further
comparative analysis.
Limited explanation of any
benchmark including
formulas is provided.

Consistent evidence of own
research to provide examples
of three industry specific
benchmarks the hotel could
use for further comparative
analysis. Consistent
explanation of each
benchmark including
formulas is provided.

Demonstrates an advanced
evidence of own research
to provide examples of
three industry specific
benchmarks the hotel could
use for further comparative
analysis. Well-developed
explanation of each
benchmark including
formulas is provided.

Highly sophisticated
evidence of own research
to provide examples of
three industry specific
benchmarks the hotel could
use for further comparative
analysis. Thoroughly
developed explanation of
each benchmark including
formulas is provided.

BIZ201_Assessment3 Brief_M3_Case Study Page 10 of 10
c) Interpret and
analyse the
information
contained in
general
purpose
financial
statements, to
evaluate the
overall
financial
position and
performance
of a business.

10%
Correct citation of key
resources and evidence
Overall structure,
appearance and
referencing of the
report are assessed
6%

Demonstrates
inconsistent use of good
quality, credible and
relevant resources to
support and develop
ideas.

Demonstrates use of
credible and relevant
resources to support and
develop ideas, but these
are not always explicit or
well developed.

Demonstrates use of high
quality, credible and relevant
resources to support and
develop ideas.

Demonstrates use of good
quality, credible and
relevant resources to
support and develop
arguments and statements.
Shows evidence of wide
scope within the
organisation for sourcing
evidence.

Demonstrates use of high-
quality, credible and

relevant resources to
support and develop
arguments and position
statements. Shows
evidence of wide scope
within and without the
organisation for sourcing
evidence.

========================================================================================

BIZ201 Accounting for Decision Making – Crystal Hotel

Crystal Hotel Pty Ltd financial statements analysis

Introduction
One important method to scrutinize financial presentations is to conduct a vertical
analysis of the presentations. This kind of analysis assists a manager in knowing the
performance of different departments in an organization (Atrill, 2009). On the other hand,
ratio analysis in finance assists administrators to come up with important decisions that
enhance growth and development of a company. BIZ201 Accounting for Decision Making- Crystal Hotel . In most times, profitability ratios, solvency,
liquidity and efficiency ratios are normally used to measure the different performance of
industry compared to the set standard of the business (McLaney and Atrill, 2012). This report
majorly analyses the financial performance of Crystal Hotel Pty limited using the vertical
analysis of profit and loss account, vertical analysis of the balance sheet and ratio analysis….

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