MA GR Hotel
GR Hotels
Student: 1057835
February 7th, 2014
Executive Summary
GR Hotels has modified its corporate goals and looks to increase occupancy as well as business travellers. Though there are financial constraints, upgrading both hotels would best allow GR Hotels to achieve this objective. The implementation plan will insure that brand and other issues with this alternative will not hinder its success.
Introduction
The purpose of this report is to perform a financial analysis that will allow GR Hotels to achieve the new corporate goals. Alternatives will be analysed and will allow a recommendation to be made.
Overview
Organization: GR Hotels Corporation
Audience: The entire executive management team (Mayd, Bluenose, Lavioli, and Sutton)
Role: Chris Mell, CMA
Subject: New corporate goals
Situation Analysis
a) Stated Mission: GR Hotels provides clean, comfortable rooms and good quality services to business and pleasure travellers in Toronto and Montreal at competitive prices.
b) Stated Vision: GR Hotels are the hotels of choice for travellers in Canadian cities.
c) Key Stakeholders’ Preferences: The board would like to increase the occupancy levels and the amount of business travelers. The Shareholders would like a 15% return on investment after tax on any proposed investment. Each hotel manager would also like to upgrade their hotels.
d) Constraints: The bank covenant requires an operating profit of 11%.
e) Current financial situation (See Appendix 2 for details): As far as liquidity, the company’s quick ratio is increase, thus indicating a greater ability to pay its debt. Previously the company had a higher rate of debt and thus is improving over time. The interest coverage also indicates that the company is well able to cover interest. As for activity ratio, the decreasing degree of operating and financial leverage also indicates that the company has to take on less risk in order to achieve objectives. Asset turnover is also
Student: 1057835
February 7th, 2014
Executive Summary
GR Hotels has modified its corporate goals and looks to increase occupancy as well as business travellers. Though there are financial constraints, upgrading both hotels would best allow GR Hotels to achieve this objective. The implementation plan will insure that brand and other issues with this alternative will not hinder its success.
Introduction
The purpose of this report is to perform a financial analysis that will allow GR Hotels to achieve the new corporate goals. Alternatives will be analysed and will allow a recommendation to be made.
Overview
Organization: GR Hotels Corporation
Audience: The entire executive management team (Mayd, Bluenose, Lavioli, and Sutton)
Role: Chris Mell, CMA
Subject: New corporate goals
Situation Analysis
a) Stated Mission: GR Hotels provides clean, comfortable rooms and good quality services to business and pleasure travellers in Toronto and Montreal at competitive prices.
b) Stated Vision: GR Hotels are the hotels of choice for travellers in Canadian cities.
c) Key Stakeholders’ Preferences: The board would like to increase the occupancy levels and the amount of business travelers. The Shareholders would like a 15% return on investment after tax on any proposed investment. Each hotel manager would also like to upgrade their hotels.
d) Constraints: The bank covenant requires an operating profit of 11%.
e) Current financial situation (See Appendix 2 for details): As far as liquidity, the company’s quick ratio is increase, thus indicating a greater ability to pay its debt. Previously the company had a higher rate of debt and thus is improving over time. The interest coverage also indicates that the company is well able to cover interest. As for activity ratio, the decreasing degree of operating and financial leverage also indicates that the company has to take on less risk in order to achieve objectives. Asset turnover is also
Cited: "An Interactive Exercise Steps for Solving a Business Case." CMA CPP. CMA Canada, n.d. Web. 26 Jan. 2014. <http://www.cma-cpp.com/>.