Name: Shaheen Nisha

Company: The green park hotel

Topic: Financial statements with reference to the green park

hotel.

Reg no: 119227702030

 Introduction

Every organization irrespective of nature and mission may be viewed as financial entity.
Management of the organization is confronted with issue and decisions about source of finance,
its capital structure and credit policy. In order to take strategic decisions the management needs
to assess the progress and the performance of the organization..
In any organisation, two important financial statements are balance sheet and profit and
loss account. balance sheet is a statement of the financial position of an enterprise at a particular
point of time. Profit and loss account shows the net profit or net loss of the enterprise for a
specific period of time.
When these statements of last few years of any organisation are studied and analysed,
significant conclusions may be arrived regarding the changes in the financial position of the
company.
Financial statement analysis is a process of analysing a company’s financial statements
for decision making purposes. There are various methods and techniques used to analyse the
financial statements such as comparative statements, common size statements, funds flow
statements, cash flow statements etc.

Objectives:
  To understand, analyze and interpret the basic concept of financial statements of the hotel.
 To examine the overall financial position of GREEN PARK HOTEL.
 To analyze the overall financial performance of the hotel.
 To determine the short term and long term solvency of the hotel.
 To evaluate the past performance and assess the current position of the hotel.
 To estimate the earning capacity of the hotel.
 To identify the reasons for change in the profitability and the financial position of the hotel.
 To examine the effects of COVID 19 pandemic on the every day work and the overall
performance of the hotel.
 To identify the financial position of hotel before and after the COVID 19 pandemic.

Scope of the study:

  The study of financial performance evaluation is confined to the financial position of GREEN PARK
HOTEL.
 Performance Evaluation is confined only for the period 5 years i.e., from 2016-20.
 The Financial Performance Evaluation is carried out on the basis of secondary data i.e., the annual reports of
GREEN PARK HOTEL.
 The scope is limited to secondary data only.

NEED FOR THE STUDY:

A company’s financial statements provide various financial information that investors, creditors
and analysts use to evaluate a company’s financial performance. Much of the information
 presented in a financial report is required by law or by important company management as a
means of communicating past successes as well as future expectations. By publishing financial
statements, management can communicate with interested outside parties about its
accomplishments running the company.

 Financial statements analysis is an important aspect which determines and helps the organization
to track its progress and know the position of the company.
 The study is needed to show the financial position of the company and its progress.
 It is really important to know the changes in the financial positions of the company after the hit
of COVID 19 pandemic.
 The pandemic has caused a lot of damage to all the companies and other businesses no matter
small or big so it is needed to know how the pandemic affected the company.
 This study is needed to study and analyze the problems caused by the pandemic and to provide
recommendations to the management to reduce the problem.

Methodology:

Research methodology is considered as the nerve of the project. Without a proper well organized
research plan it is impossible to complete the project and come to any conclusions. So the
research methodology of my project consists of two types of data, primary data and secondary
data.
 Primary data:
Primary data is the data that is obtained through a study specifically designed to fulfill the
data needs of problem at hand. This data is collected by direct, personnel interview and indirect
 oral interviews. This data can also be collected by issuing questionnaires to the departmental
heads and other workers. However in the study primary data is not used as this study does not
require any kind of primary data.
 Secondary data:
Data was collected from books, websites and going through the records of the organisation. It is
the data which has been collected by individual or someone else for the purpose of other than
those of our particular research study or in other words we can say that secondary data is a data
used previously for the analysis and the results are undertaken for the next process. My study is
completely based on secondary data i.e., on the financial records of the hotel.

Limitations of the study:

1. The major limitation is the short time span available for the study.
2. The scope of information was limited due to pandemic.
3. The study is based only on the information let out by the company.
4. The company has kept some of the data confidential.
5. Due to lack of time of executives in the organization, they didn’t allow me to conduct the
interviews.
6. There are changes in the price level due to inflation.
7. Many are calculated using historical costs, and they overlook the changes in price level between
the periods.
8. This does not reflect the correct financial situation.
 CHAPTER - 2
INDUSTRY PROFILE

INDUSTRY PROFILE
Hotel industry has been playing an important role in the economic development
of various countries. Almost all the developed countries and a majority of
developing emerged as service economies. USA was the first economy to become
a service economy. The basics intermediate demand for the development of the
service sector are growth in intermediate demand from various manufacturing
organizations which are in the process of unbundling and direct demand from
customers. Service sector has been given important place in the Indian planning
since the sixth five-year plan. The hotel industry contribution to the GDP of India
rose from 28.6% to 45.19% in 1998-99. However the statistics do not reveal the
true picture as the hidden service sector and services in the unorganized sector are
not added to the total. There is a tremendous potential for the growth of service in
the country. The major services in the country are Transport and Communication.
Trade, Hotels and Restaurant, community, social and personal services and Finance
and real estate services.
Service industry has shown a tremendous growth in India. In recent years
according to government estimates services industry is growing to overtake the
agriculture in Indian economy. Apart from providing most jobs and benefits it is a
major source for earning foreign exchange in India. Services sector accounts for
maximum employment and major contribution to GNP of every economy in the
World. The food services industry is entering the21st century in a state of Flux.
Increased competition, labor shortages, more discerning and demanding customers,
rapid changes in technology, food safety concerns, and shifting revenue streams are
the Factor operators of every ilk will need to wrestle within the coming years, the
food service segment that might experience strong growth according to the
consensus.

Fresh ingredients, higher quality foods, and fuller flavors more variety in spices,
increased use of vegetables and healthier eating made a fairly predictable list of
food trends. But the consumer tastes and preference changes with startling rapidity
and what’s hot today may not be tomorrow. Trends can be pinned down and the
patterns and preferences will matter into the new century can be discerned.
However the eating out habit is hard to break and frequency of dining outside will
continue on an upward trend.

HOTEL – THE CONCEPT:

Initially the term hotel was meant for local motorists and foreign tourists
traveling by road. Basically Motels serve the needs and requirements of these
travelers and meeting the demand for transit accommodation. We can also call
hotel over night stay. Some of the important services offered by hotels are parking,
garage facilities, accommodation, and restaurant facilities. Hotels are found
equipped with filling stations, accessories, service of elevator to the automobile
entrance restaurant etc., Hotels are found located outside the city. Preferably by the
side of high ways and important road junctions The accommodation available in
the hotel is more in the category of a ‘chalet facility’. This has a dinning hall with
fixed menu. In USA the hotel accommodation is ranked at par with hotel
accommodation.

TYPES OF HOTELS:
Star Hotels:
It is a Western-style hotel, they provide modern facilities. Therefore, star hotels
are the finest types of hotels. They are found in metropolitan cities and major
tourist areas. However, the hotels vary from five stars deluxe to one-star, based on
the services and facilities of the hotels.

Commercial Hotels:
Commercial hotels primarily cater to individual travelers. Besides, commercial
hotels are located in business centers, cities, or towns. They provide basic facilities
to their guests. The private owners run the hotels. Hence, the success of
commercial hotels depends on the type of service and facilities they provide.
Apartment hotels:
The idea of the Apartment was started in America. This kind of hotel is often
defined as residential homes with hotel facilities. It is known as an apartment hotel
because the facilities are similar to our home.
Rotel:
Rotel is an air-conditioned coach; it offers lodging, sleep, food, and complete
transport. The Rotel offers a bed, reading lamp, article rack, and a personal mirror
for each passenger. Besides, the sleeping coach of a Rotel has a three-tier room
with a bed next to the wardrobe. In addition, this kind of hotel has a kitchen with a
sink, cupboard, and fridge.
Floating Hotels:
The old ships, which were used for passenger transport, are converted into
hotels, with modern facilities. These converted hotels are known as floating hotels.
This type of hotel is located on the surface of the water, rivers, or lakes. The
facilities of this hotel are similar to regular hotels. Hence, it has become popular in
many locations.
Heritage Hotels:
Palaces, Castles, Fortresses, and Havelis of the Royal property are converted into
hotels to let the guests experience the culture and tradition of the Royal families.
These properties are renovated with modern facilities for the guests. In India, the
states of Rajasthan and Gujarat are famous for heritage hotels. Examples of
heritage hotels are Lake Palace in Udaipur and Umaid Bhavan Palace in Jodhpur.
Resort:
The resort provides visitors a place to sleep, relax, and enjoy. Resort hotels meet
the needs of visitors traveling for health or climate change. The focus of resorts is
rest, relaxation, and recreation. The resorts are located close to the ocean, hills, and
other areas of natural beauty.

Motels:

The motels serve the basic requirements for motorists. Motels do not have star
grading. Compared to the hotels and due to the lack of amenities motels are less
expensive.

GROWTH OF HOTEL INDUSTRY:

The real boom in the hotels came in the 20th century. The new hotel area was
first dominated by the Oberoi group, Taj, ITC – Welcome Group, ITDC and other
large luxurious groups of hotels.
 The hotel industry in India is a part of the travel and tourism industry. Business
travellers are gradually increasing in number due to the rapid growth of the IT
sector and the emergence of several global companies.

The key performance indicators (KPIs) used by the industry to measure business
expansion and manage hotels are average room rate (ARR) and revenue per
available room (RevPAR). The ARR stood at INR 5,458.68 in FY 2020 as against
INR 5,671.00 in FY 2017. It is expected to reach INR 6,292.85 by FY 2025 while
expanding at a compound annual growth rate (CAGR) of ~2.49% between FY 2021
and FY 2025.

In FY 2020, the RevPAR was ~INR 1,951.34 and is expected to reach INR
3,336.28 by FY 2025. It is expected that the hotel industry will expand at a
promising rate since India will be hosting the ICC Men's World Cup in 2023. It has
been assumed that this event would increase foreign tourists' footfall in the country.

Employee management is a major challenge faced by the industry. The

attrition rate has gone up due to the lack of workforce quality and increased
competition for trained employees from competing service sectors, such as
aviation.
The Popular Groups of Hotels in India are listed below:

o The Leela Palaces, Hotels and Resorts

o Taj hotel

o ITC Hotels

o Lemon Tree Hotels

o The Oberoi Group

o Neemrana Hotels

o The LaLiT

o The Residency Group of Hotels

o Sarovar Hotels & Resorts

o Indian Hotels Company Limited

o Oyo Rooms

New Hotels opened in 2020 and to be opened in 2021 in India:

1. Welcomehotel shimla
2. The johri
3. The leela palace Jaipur
4. King’s mansion, goa
5. Six senses fort, barwara
6. Tree of Life Homestead, Corbett Country
7. Hilton Goa Resort
8. Taj Chia Kutir Resort & Spa, Darjeeling
9. The Postcard Hotel

‘BEST WESTERN’HOTELS:
World’s largest hotel chain comprises 4100 hotels across countries is being
represented in India access worldwide as the exclusive general sales agent. The
hotel chain with a strong back up in the US and the growing awareness in Europe is
slowly gaining ground in the Middle East and Australia. With 16 hotels in India
alone, the chain is all set to establish them as a prominent chain in league with the
Holiday Inn and on the lines. The best advantage Best Western has is their being a
budget Hotel chain is the demand of the hour.
The western hotels in an exclusive tie-up have launched a special promotion with
Amadeus to promote and sell Best Western Hotels world wide. The incentives to
the people handling the systems range from a pen to a free holiday abroad. The
promotion comes at a very critical time when the season from India is dying out
and the travel agents are less engulfed with queries and have more time to think and
plan.
A humble beginning was made in 1946, when Guertin founded Best Western
Hotels an hotelier with 23 years of experience in the business. The chain began as
an informal link between properties with each hotel recommending other lodging
establishments to travelers. This “referral system” consists of phone calls from one
front desk operator to another. In 1948 five million copies of the BMW guide were
published. Today it is with world’s best rated online reservation system and a host
of toll free lines at free numerous locations worldwide.

‘SAVOY’:
The hotel was started in 1889 by a whiz kid impresario called Richard D’Oyiy
Cartr. At the age of 29 he had found his pot of gold by commissioning Gilbert and
Sullivan to write Trail by Jury which was followed by other smash hits.
At the age of 39 the dreams of building the world’s most perfect hotel and
backed by the glitziest nouveae riche angels. Lord Chamberlin and he occasionally
then opened the Savoy, the flashiest and the most reputed hotel in the world. But
still, respected society was not impressed. What was needed was a star, a big one.
Roping in Cesar Ritz, a young Hotelier with an enormous following to turn the
show and chief Augusto Escopffer, D’Oyl carte made hotel the hottest ticket in
town.
According to the largest figures, hotels and other tourism related industries
directly employed over 5.3 million people in the country. It is estimated that at
least another 13 million people were indirectly employed by the tourism sector.
‘SPACE HOTEL’:
Space construction company ‘Orbital Assembly Corporation’(OAC) recently unveiled new
details about its ambitious project of building a hotel above Earth’s atmosphere. Gateway
Foundation first came up with the concept in 2012 and the Californian company later established
OAC to realise its dream of building the first commercial hotel in space. The company is
planning to start building the hotel, Voyager Station, in the low Earth orbit in 2025 that could be
operational as early as 2027, reported the Daily Mail.
The space hotel will be different from the International Space Station (ISS) since the giant
wheel with 24 modules, connected by elevator shafts, will rotate to generate artificial gravity of a
level found on the Moon’s surface. It will also have 44 emergency return vehicles (ERVs) with
automated flight controls for autonomous landing, according to the construction company.
With over 11,600 square metres of habitable space, the commercial station will have many
features expected in a cruise ship, including luxury villas, hotel suites, gym, restaurant and bar.
 “Simulated gravity will offer amenities like toilet facilities, showers, and beds that function
similar to what you are used to on Earth,” the company’s website says.

AWARDS FOR OBEROI’S WINDSOR:

The Windsor in Melbourne an Oberoi hotel has been awarded by the Australian Hotel
Association for “Top Hotel Accommodation” and “Best Restaurant” the selection criteria of
which were standards of service and food, staff training and the provision of special feature in the
building.

“REVIVAL HOTEL”, BARODA WINS FHRAI AWARD:

The Barot groups Revival Hotel in Baroda has won the prestigious federation of Hotel &
Restaurant Association India’s Environmental Friendly of the year award, in the second position.
The property a boutique hotel has been among the first in the hospitality industry to accord great
significance to the concern for ecology. The award will be presented to revival at the FHRAI
convention held in Mumbai. The hotel’s Kamles Brot says “It is the first time that a professional
body like the FHRAI, besides the tourism department, Government of India is giving an award on
Environment; We humbly and gracefully accept it”.

THE ‘PARK HOTEL’:

In the heart of the capitals business, government and tourist centers across the street from the
Jantar Mantra a hop skip away from Cannaught place just down the road from the Parliament the
Park Hotel has opened business.

The property has all the amenities of a deluxe hotel 24 hours a coffee shop, especially
restaurants and bars, landscaped gardens and swimming pool. It also has an Exclusive
conference and banquet facilities and fully equipped business center. It is third link in the part
chain after Calcutta and Visakhapatnam.

HOTELS IN VISKHAPATNAM:

There are more than 144 hotels and places to stay in Visakhapatnam. among these hotels e few
are named below.

 Novotel, varun beach.

 Welcomehotels by ITC hotels, devee grand bay.
 The gateway hotel, beach road.
 Four points by Sheraton.
 The dolphin hotel.
 The greenpark hotel.
 Fairfeild by marriott.
 Hotel daspalla.
 Treebo trend, MVP ground.
 Hotel winsar park.
 Hotel five elements.

 Palm beach hotel and resort.

 Hotel supreme.
 Radisson blu resort.
 Taj hotel.

 Then bheemili resort.

CHAPTER - 3

COMPANY PROFILE
 Hotel Green Park, Visakhapatnam is a member of Diana Hotels Ltd. The various companies
under Diana Group being.
 Diana Projects Engineers Ltd
 GM Reddy and Associates.
 Green Park Hotels & Resorts Ltd,
 Coastal Constructions leasing Pvt. Ltd,
 Indus Investment Pvt. Ltd,
 Vijaya Products Ltd,
 Diana Software Solutions Pvt. Ltd.
The Diana hotels started its operations in November 1991. The first hotel of the group was
stated in Hyderabad under the brand name GREEN PARK in 1991 and it has consolidated its
position as a business class hotel by vigorously pursuing the policy of maintaining world class
standards at the most affordable prices.
Later, the Diana group acquired the former “APSARA HOTEL” in Visakhapatnam and has
successfully constructed it into their second hotel in the GREEN PARK line in December 1995
on similar philosophy of quality service. Regardless of number of hotels it maintains. Green
Park is known for its world-class quality service. Many a times, it was nominated as the BEST
ECONOMICAL BUSINESS CLASS HOTEL.
The quality of people and service in Hotel Green Park at both Hyderabad and Visakhapatnam
make it worth visiting. One can experience the tender touch of real service at Hotel Green Park.
The Third Hotel of Diana Hotels Ltd is Green Park, Chennai. Regardless of number of hotels
it maintains, Green Park is known for its World-class service at affordable price-many a times, it
was nominated as best economical business class hotel.
The senior executive working in the organization has imbibed services and focus on quality
into the organizational culture. It is believed at Hotel Green Park that unless we change our
attitude to insist people and have something to offer and body will be interested in India. Till
 then we will be a minor destination. It is not enough to have attractive tourism places. They
have to be spruced up to attractive tourists, so that we can complete with the countries like
Malaysia Singapore.

GREEN PARK INTRODUCTION:

Green Park is one of the best “Value for Money”, VFM hotel in this part of the country and the
responsibility of further maintaining and improving world-class standard-lives with it. In the
Green Park family, they always believe in being the best as far as quest services and concerned.
They follow the motto of the 4 G’s.
The 4 G’s are
 Guest is our god.
 Green park is our temple
 Good work is our prayer
 Guest delight is our reward.

Global Destiny
The Green Park family (staff) has a missionary zeal to achieve their objectives.

MISSION OBJECTIVES:

 Customer Intimacy
 Fast service
 Hassle free service
 Deliver more value than the customer expectation
 Superior quality
 Care and concern

 Operational Excellence
 Proper systems, proper people, Proper training
 Defect free product & service
 Eye for detail, Fast and flexible, Communication
 Feedback, controls and correction mechanisms, cost control.
 Product Leadership
 Superior product
 Superior value
 Up-to-date
 Innovation and creativity
 To foster intellectual capital
 Focus on people
 Build knowledge
 Build creativity
 Build talent at all levels
 To Nurture “Thinking”, “Analysis”, and “Innovation”.

ORGANIZATIONAL GOALS:
 To foster a nurturing work environment
 To develop leadership at all levels through effective delegation
 To develop people at all levels through empowerment
 To sharpen skills at all levels through focused training
 To encourage creativity and value addition at all levels.
Organization Philosophy-Ordinary people doing extra-ordinary things.

VISION STATEMENT:

Fast:

To display a sense of urgency and bias for action and to react quickly to market changes,
customer needs an team members input as a company and individual team member.

Focused:

To display a spirit of continuous improvement, dedicate energy, attention and resources to

make our processes and practices as efficient and effective as possible.

Flexible:

Cooperation and teamwork among the team members and between departments and properties
will keep the company aligned and increased productivity. The company continuously
encourages the idea exchange and participative decision making.

People:
 At Hotel Green Park the people are valued as the most treasured assets.

GREEN PARK VISAKHAPATNAM PROFILE:

Hotel Green Park – Visakhapatnam is located in the heart of the city, at close proximity to the
railway station and business center and takes about 20 minutes to reach the Airport.

The Address of the Hotel is

Hotel Green Park,

#126-1-17,

Waltair Main Road,

Visakhapatnam-2,

Andhra Pradesh,

India.

Telephone : 0891-6615151,6625534

Fax : 0891-2563763

Website :WWW. Hotelgreenpark.com

Total Rooms: 110

No. of Floors: 06

Hotel Ratings: 4 star

Hotel Type : Business and Leisure Hotel

Rooms:

Type of room No

Deluxe rooms - 41

Club rooms - 25

Quality suite - 09

Executive suite - 05

Executive rooms - 30
 Floor Wise Rooms:

 First Floor - 06
 Second Floor - 28
 Third Floor - 28
 Fourth Floor - 25
 Fifth Floor - 08
 Sixth Floor - 15

They have Five Food and Beverage outlets located as follows:

They have Five Food and Beverage outlets located as follows:
TULIPS - Multi cuisine restaurant.
R&G - Multi Cuisine restaurant. [Buffet]
MUSTANG BAR - Premium Bar
Mekong - Pan Asian Restaurant.

Events:
Our event spaces can host from 17 to 650 guests across various seating styles. Be it a
corporate meet or a family event, you have the complete assistance of well-trained staff and the
assurance of superior event facilities to make your important day memorable

The various Conference & Banquet facilities available in Hotel Green Park

 Chancery - The largest with a capacity of 300 people

 Consulate - With the capacity for 35 Persons
 Meadows - Open air lawns with capacity for 1500 people

Other Services:
 In house Laundry & Dry cleaning.
 24 hours Room Service.
 Travel & Rentals.
 Business Center (for net browsing for the Guests).
 Shopping Arcade.

BOARD OF DIRECTORS
 Mr. G Harischandra Reddy Chairman
 Mr. A Mohan Krishna Managing Director
 Dr. K Anji Reddy Director
 Mr. K.V.Ravindra Reddy Director
 Mr. G.V.Prasad Director
 Mr. Y.V.S.S.Murthy Director

DEPARTMENTAL FUNCTIONS IN HOTEL GREEN PARK:

As mentioned earlier various departments for the basis hotel green park. The functions of
each of the departments are described as below.

FRONT OFFICE DEPARTMENT:

Hospitality is the basic component in the hoteleiring industry, and the Front Office department
is all about hospitality and image building. Front Office is the first department with which the
guests come in contact; therefore it is up to this department to keep up the image of the hotel.

The personnel in the Front Office department receive the guests and guide them to their rooms
or required places, offering them helpful guidance whenever required. Since the Front Office
personnel are the personnel with whom most frequent contact is established by the visitors, they
need to possess a pleasing demeanor under all situations. The various sections of this department
are telephone, reservations, reception, bell desk, cashier, hospitality desk, business center.

This department as it is the first to come in contact with the guests it implies to this department
to impress a good image of the hotel to the guests.

HOUSE KEEPING DEPARTMENT:

The House Keeping department looks after the overall sanitation of the hotel. It contains an
executive, supervisors, houseman and other staff. The primary job of the department is to see
that all areas of the hotel are kept clean. If falls upon the House Keeping department to change
the bed sheets, linen etc… in the individual rooms and take care of the laundry requirements of
the guests.

The House Keeping department plays a prime role in bolstering the image of the hotel for it’s
an essential service and bears direct contact with the guests.
 The house keeping departments works in three shifts. They are-

1. SHIFT A - 7.00 To 16.00 Hrs

2. SHIFT B - 13.00 To 22.00 Hrs
3. SHIFT C - 22.00 To 7.00 Hrs

The following are the files and registers at DESK of Housekeeping…

 Guest calls
 Departure
 Key
 Staff placement
 Briefing
 Guest comment
 Logbook
 Attendance
 Handover
 Staff movement
 Lost & Found
 Job order

ENGINEERING DEPARTMENT:

This is the unique department handling exclusive by the technical aspect of the hotel. This
department acts, as the nerve center to carry out the operations in the hotel every department is
directly dependent on this department.

It supplies each department with the required proportion of power. It also looks into the
repairs all over the hotel including the pipelines. The water supplied in the hotel is first
processed in its processing plant and then let out; therefore every basic necessity of the entire
hotel is fulfilled by this department.

SECURITY DEPARTMENT:
 In the ancient treaties, the Arthasastra, Kautilya give great element of importance to the
maintenance of security at home and outside. Indeed, security is a very important aspect of
running a hotel, for when people walk in unsuspectingly to be your guest, its imperative that due
importance should be given to their life and belongings.

Over here, the Security department consists of an executive, four supervisors working on
contract and their crew. Among the functions of the security department are included.

Checking of non-executive staff.

 Checking of all in and out movements.

 Surveillance of the entire hotel.
 Curtaining non-disciplinary actions.
 Surveillance of hotel staff.
 Emergency duties like fire fighting etc…
A unique feature of the security department is that is possesses a key to every department in
the hotel.

The boys are distributed on geographic bases in the hotel premises. Two boys at the gate, one
in the lift each in each floor and two at the office. The supervisor is one for each shift.

FINANCE DEPARTMENT:

The accounts department is headed by the Finance manager and is assisted by Dy. Manager.
This department runs with 20 staff members. Being a major for any organizations, very minutest
detail must be taken care of and hence, the accounts staff is responsible for off. Account
department has to cooperate and coordinate so that the company is operational a break-even with
less occupancy ration.

FUNCTIONS FINANCE DEPARTMENT:

 Preparation of budgets.
 Preparation of monthly inventory.
 Preparation of accounts of the company.
 Collection and compliance of information required to be submitted to the top management.
 Budgetary control.
 Cost control.
 P&l a/c analysis.
 MIS.
 Internal audit.
 Break even analysis.
 Cash flows

SESSIONS IN FINANCE DEPARTMENT:

 Income a/c’s.
 Payable a/c’s.
 F& b controls.
 Stores.
 Purchase.
 Restaurant cashier.

INCOME ACCOUNTS:

FUNCTIONS:

 Cash collections.
 Credit card collections.
 Foreign currency.
 Receivables (cr’s).
 Verification of bills f&b controls.
 Liquor inventory.
 Food inventory.
 Unauthorized food consumption.
 Preparation of food cost.
 Preparation liquor cost.
 Preparation of smokes cost.
 Void bills checking.
 Non chargeable kots.
 PAYABLE ACCOUNTS:

FUNCTIONS:

 Supplier’s payments.
 Statutory payments.
 BR’s.
 Verification of cash and bank balances.

STORES AND RECEVIABLES:

FUNCTIONS:

 Issues
 Procurement.
 Purchase of requirement indent preparation.
 Perpetual inventory.
 Minimum stock level checking.

PURCHASE:

FUNCTIONS:

 Purchase requisition from concern department.

 Collect quotation.
 Prepare the comparison statements of quotations.
 Raise the purchase orders.
 Markets survey.

RESTAURENT CASHIER:

FUNCTIONS:

 Bills preparation according to kots.

 Taking care of discounts.
 FOOD & BEVARAGE (SERVICE) DEPATMENT:

It acts as a medium through which the services produced are offered to customers. Its
restaurant service offers its services to the customers in the three eloquent restaurants namely.

 Tulips
 Mustang Bar
 R&G
 Mekong
While the room service is meant for the guests residing in the rooms of the hotel. The
Banquet service looks after the gathering and functions conducted in the hotel premises.

This department is headed by an executive followed by the captains leading their teams to
offer their best services to their guests.

FOOD &BEVERAGE (PRODUCTION) DEPARTMENT:

A hotel gains its reputation through the quality of services it offers to its customers among the
variety of services catering is the prime service. It is so because this is the aspect in which one
hotel distinguishes its self among others.

F & B (P) is the department, which holds the key responsibility for this service. This
department cooks food to cater the tastes of its customers. It is divided into Indian, Continental
and Chinese. In each section com-I is the head. The type of food ordered for is prepared in its
exclusive section.

KITCHEN STEWARDING DEPARTMENT:

While the Chefs go about their working chores, it is necessary that there should be someone to
take care of the sanitary requirements of the kitchen, maintain the cooking utensils etc. The
kitchen steward department steps into fulfill the role. The kitchen stewards department consists
of an executive, assistances and contract workers and member of his staff. It falls upon the
department to see that the conditions of the kitchen are hygienic, that all the plates, utterly and
working utensils are washed and kept clean, that the various appliances in the kitchen and see that
they are supplied to the same. In short, the hygiene of the food being served to the guest depends
a lot on the efficiency of the kitchen stewards department.

HR ACTIVITIES:
 The following are the human resources activities followed by Green Park, Visakhapatnam.

HR Functions:

 Recruitment and Selection

 Time office function like attendance, leaves, absenteeism, personal grooming
 Maintaining personal files, Performance Appraisal
 Training and Development
 Induction
 Career development programs
 Compensation management
 Taking care of statutory compliance like ESI, PF etc…
Welfare facilities:
Salaries are calculated from 26th of previous month to till 25th current month and pay slips are
issued at one day in advance. Salary credit is given withing the concerned bank account which is
payable at AXIS bank. Attendance is taken on swipe cards.

MARKETING ACTIVITIES:

It is headed by Marketing Manager done his marketing activities with the help of
tr. Sales assistant to sell the rooms, conference halls, food & beverage.

Oral Selling Public Relations

Hotel Green Park interacts with Firms, Companies, Corporates, Insurance companies,
Shipping companies, Licensing agents and meets the top head and explains the services Green
Park is rending to the valued customers across the country and to make them put their case in
Green Park, Visakhapatnam.by group coordinators. They shall go a long way in marketing the
quests feel homely after their tiresome day to staff.

ACHIEVEMENTS OF HOTEL GREEN PARK:

 Mr. Varghese George, Vice President, Green Park Hyderabad Awarded General Manager of the
year 1998
 Mr. K.V. Madhu Nair, Green Park, Visakhapatnam Awarded General Manager of the year-
Economy Hotel 1999.
 Mr. Mohan Krishna, Green Park, Hyderabad Awarded Front Office Manager of the Year- 1999.
 The Best Economy Business class hotel, Green Park Visakhapatnam for
the year-2001.

 Star Achievers Award for Excellence in Hospitality Industry, Green Park Visakhapatnam for the
year – 2007
 Emerging India 2007 Award (Under Travel & Tourism Category), Diana Hotels Ltd for the year
-2007.
Nominations:

 Best Economy Hotel, Green Park, Hyderabad, 1994

 Best General Manager, Green Park, Visakhapatnam, 1997
 Best General Manager, Green Park, Hyderabad, 1997
 Best General Manager, Green Park Visakhapatnam, 1998
 Best Front Office Manager, Green Park Hyderabad, 1998
 Best House Keeping of the year, Green Park Hyderabad, 1999
 Best Economy Hotel, Green Park, Visakhapatnam,1999
 Best Economy Hotel in India ,Green Park Visakhapatnam,2001
 Best economy Hotel in india green park, Visakhapatnam, 2007
 Star Achievers Award ,Green Park Hyderbad, 2007
STATE AWARDS
 Green Park – Hyderabad has been awarded “ The Best 4 Star Hotel In The State “ by the
Department of Tourism – Andhra Pradesh In the Year 2007.
 Green Park – Hyderabad has been awarded “ The Best 4 Star Hotel In The State “ by the
Department of Tourism – Andhra Pradesh in the year 2005.
 Green Park –Hyderabad has been awarded “ The Best 4 Star Hotel In The State “ by the
Department of Tourism –Andhra Pradesh in the Year 2004.
 Green Park –Hyderabad has been awarded “ The Best 4 Star Hotel In The State “ by the
Department of Tourism –Andhra Pradesh in the Year 2003.
 Green Park –Visakhapatnam has been awarded “ The Best 3 Star Hotel In The Region “ by the
Department of Tourism – Andhra Pradesh in the years 2001,2004,2006.
 Green Park –Visakhapatnam has been awarded “ The Best 4 Star Hotel In The Region “ by the
Department of Tourism – Andhra Pradesh in the year2007.
Green Park Hyderabad was recognized for Excellence in Conservation of Energy by The Institute
of Engineers (India) A.P. State Centre
FINANCIAL STATEMENT ANALYSIS

Introduction:

In the preparation of final accounts of a firm, the financial statements display the net results
for the given year. They play a vital role in allowing a user of a financial statement, to understand
 the results of a firm for a given year. Let us find out more about what a financial statement is and
their relevance.

A financial statement is a formal record of the financial activities, and position of a business,

person, or other entity. It is presented in a structured manner and in a form easy to understand.

Meaning:

Financial Statement generally consists of three basic statements the income statement, the
profits and loss account and the Balance sheet. The statement of the earnings and sources and
uses o funds statements financial statement taken to gather, give the financial statement, taken to
gather, give accounting picture at the first operation and financial position. The package of
finance statement includes such schedules as the relating to fixed assets, long term investment
long term debts. Accrued liabilities. Cost of goods manufactured, selling expresses and
administrative and general expenses. There schedules mainly supplement the information
contained in the financial statement and are considered essential for the purpose at analysis. In
addition, explanatory from notes are also given as an integral past at financial statements when
the information given in the financial statement and schedules are inadequate. The inventory
valuation and at depreciation, description at contingent liabilities etc.

COMPONENT OF FINANCIAL STATEMENT:

The main components of financial statement which are as follows:

 A statement of financial position as at the end of the period:

 A statement of comprehensive income for the period.

 A statement of changes in equity for the period.

 A statement of cash flow for the period.

 Notes of Account comprising a summary of significant accounting policies and other

explanatory information.

TYPES OF FINANCIAL STATEMENTS:

1. INCOME STATEMENTS:
 The income statement or profit and loss accounts are considered to be the most useful of all
financial statements. Its explains the position of business as a result of operations. It mat chew
the revenues and costs shows the net profit earning or loss suffered during a period of time. It is
score board of company’s performance during a period of times.

The nature of the “Income” which is the centre points of the income statement can be stated as
surplus of output over inputs. The outputs are the goods and services that the business provides to
its customs. The values of these outputs are the money paid by the customers for them. These
amounts are called “revenue”. The inputs are the economic resources used by the business in
providing these goods and services, these are as ‘expenses’, when expenses are excluded from
revenue profits can be secured.

2. BALANCE SHEET:

Balance sheet is a statement of financial position of a business at a specified point of time. It

represents all assets owned by the business at a particular point of time. It is a blue print of the
financial condition of the business at the time. the vital distinction between an income statement
and a balance sheet is for a period while balance sheet is on particular date. Income statement is a
flow report as different from the balance sheet, which is static report. But both are
complementary to each other.

3. STATEMENT OF RETAINED EARNINGS:

Retained earnings means they accumulated surplus of earnings over loss and dividends. The
favourable balance shown by the income statement is transferred to the balance sheet through this
statement, after making necessary appropriations. So it is a connecting link between balance sheet
and the income statement. The statement is also termed as profit and loss appropriation account
in case of companies.

4. STATEMENT OF CHANGES IN FINANCIAL POSITION:

The balance sheet shows the financial position of business at a particular point of time while the
income statement provides the results of operations of business over a period of time. In order to
understand the affairs of the business it is necessary to identify the movement of working capital
 or cash in and out of the business. This information is available for the statement of changes in
financial position.

ANALYSIS OF FINANCIAL STATEMENTS

Analysis of financial statements refers to process of the critical examination of financial

information contained in the financial statements in order to understand and make decisions
regarding the operations of the firm. The AFS is basically a study of the relationship among
various financial facts and figures as given in asset of financial statements. The basic financial
statements are the balance sheet and the income statement contains a whole lot of historical data.
The complex figures as given in these financial statements are deselected or broken up into
simple and valuable elements and significant relationships are established between the elements
of the same statement or different financial statements. The process of dissections, establishing
relationships and interpretation these are to understand the working and financial position of a
firm is called the AFS. Thus, AFS is the process of establishing and identifying the financial
weakness and strength of the firm.

TYPES OF FINANCIAL ANALYSIS:

Financial analysis can be classified in to different categories depending up on

1. On the basis of material used.

2. On the basis of modules

 Types of
financial
analysis

on the basis on the basis

of material of modulex

internal external horizontal vertical

ON THE BASIS OF MATERIAL USED:

According to the basis, financial analysis can be of two types

(i) EXTERNAL ANALYSIS: This analysis is done by outsiders who do not have access to
the detailed internal. Outsiders include investors, creditors, Agencies, Credit Agencies and
general public. For financial analysis, these external parties to the firm depend almost entirely on
the publish financial statements.

(ii) INTERNAL ANALYSIS: This analysis is undertaken by the person namely

executives and employees of the organization or by the officer appointed by government or court
who have access to the books of account (internal accounting records) and other information
related to the business.

ON THE BASIS OF MODULES OPERANDI:

According to this financial analysis can also be of two types:

(i) HORIZONTAL ANALYSIS:

Horizontal analysis refers to the comparison of financial data of a company for several years. The
figures for this type of analysis are presented horizontally over a number of columns. The figures
of the various years are compared with standard or base year, a base year is year chosen as
beginning point. This type of analysis is also called ‘dynamic analysis’ as it is based on the data
from year to year rather than on data of any one year. The horizontal analysis makes it possible to
focus attention on items that have changed significantly during the period under view.

(ii) VERTICAL ANALYSIS:

Vertical analysis refers to the study of relationship of the various items in the financial statements
of one accounting period. In this types of analysis the figures form financial statement of a year
are compared with a base selected from the same year’s statements.

INTERPRETATION:

After making analysis of financial statements the next step is interpretation for forming an
opinion about the enterprise. This is also known as interpretation stage. The interpretation
involves the explanation of financial facts in a simplified manner. Interpretation means
explaining the business concern in simple language which may be understand even by a layman.
Interpretation is impossible without analysis. Interpretation is not possible without analysis and
without interpretation analysis has no value.

Objectives of analysis and interpretation:

The following are the objectives of analysis and interpretation of financial statements:

1. To estimate the earning capacity and efficiency of the firm.

2. To determine the short-term and long-term solvency of the firm.

3. To determine the profitability and future prospects of the concern.

4. To enquire about the financial soundness of the business concern.

5. To investigate the future potential of the convert.

6. To study whether their profits commensurate with the capital employed or not.
METHODS OF ANALYSIS:

The following methods of analysis are generally used:

1. Comparative statements

2. Common sized statements

3. Ratio analysis

4. Trend Analysis

5. Fund Flow Analysis

6. Cash flow analysis

7. Cost- Volume- Profit Analysis

MAIN TECHNIQUES OF FINANCIAL ANALYSIS:

A financial can adopt one or more of the following techniques/tools of financial analysis:

COMPARATIVE FINANCIAL STATEMENTS:

The statements which have been designed in a way so as to provide time perspective to the
consideration of various elements of financial position embodied in such statements figures for
two or more period side by side to facilitate comparison.

Both the income statement and balance sheet can be prepared in the form of comparative
financial statements.

The comparative financial statements contain the following items.

1.Absolute figures (amount in Rs. As given in the final accounts).

2.Absolute figures expressed in terms of percentages.

3.Increase of decrease in absolute figures in terms of money value.

4.Increase or decrease in terms of percentages.

5.Comparison expressed in ratios.

6.Percentages of total.

COMPARATIVE INCOME STATEMENT:

The income statement (Profit & Loss A/C) gives the results of the operations during a definite
period. It reveals the profit carried or loss incurred by the cancers. The comparative study if
income statement for more than 1 year may enable us to know the program of the concern. First
two columns gibe figures of various items for two years. The third and fourth column used to
show increase or decrease in figures in absolute adopted in preparing comparative balance sheets.

In first step, find out the changes in absolute figures i.e., increase or decrease should be
calculated. In second step percentage of change should be calculated with the help of following
formula.

Percentage of change = change in amount/base year amount*100

Format of comparative income statement for the year ended xx-xx-xxx

particulars Previous Present Absolute Percentage

year year change of change
(increase or
decrease)
I. Income
Revenue from
operations xxx xxx xxx xx%
Other income
xxx xxx xxx xx%

II. Total revenue xxx xxx Xxx xx%

III. Expenses
Cost of material
consumed xxx xxx Xxx xx%
Purchase of stock in
trade XXX XXX XXX XX%
 Changes in
inventories XXX XXX XXX XX%
Work in progress
and Stock in trade XXX XXX XXX XX%

Employee benefit
expenses XXX XXX XXX XX%
Finance cost XXX XXX XXX XX%
Depreciation and
amortization XXX XXX XXX XX%
expenses

Other expenses XXX XXX XXX XX%

IV. Total expenses XXX XXX XXX XX%
V. Profit before
exceptional XXX XXX XXX XX%
items and tax
(II+IV)

Exceptional items XXX XXX XXX XX%

VI. Profit before XXX XXX XXX XX%
tax
Income tax XXX XXX XXX XX%
expenses
VII. Profit for the XXX XXX XXX XX%
year

Guidelines for interpretation of income statement:

1.The increase or decrease in sales should be compared with increase or decrease in cost of goods
sold. If increase in sales is more than the cost of goods sold. It means that the probability of the
concerns is increased.

2.The amounts of gross profit should be studies.

3.Operating profits should be studied. The express should be deducted from gross profit to find
out operating profit and then operating income should be added.

4.The next step is some of the non-operating expenses are to be deducted from the operating
profits and non-operating incomes should be added to get net profit.
Comparative balance sheet:

The balance sheet prepared on a particular date reveals the financial position of the
concernon the date to study the trends of business over a period of time comparative balance
sheet reveals the cause for changes in the financial position on amount of various transactions.
The comparative balance sheet consists of two columns for the original data. A third column
usedto show increase or decrease in various items. A south column containing the percenincrease

Format of comparative balance sheet as on xx-xx-xxxx

PARTICULARS Previous Current Inc./ Dec. %

year year Change

EQUITY AND
LIABILITIES

i Shareholders’ Funds
XXX XX
Share Capital
 XXX XX
Reserves and Surplus XXX XXX

ii Non-current Liabilities XXX XXX XXX XX

Long Term Borrowings XXX XX

Other Long Term Liabilities XXX XXX XXX XX

XXXX XX
Long Term Provisions XXX XXX

Total NCL XXX XXX

XXX XX
iii Current Liabilities XXXX XXXX
XXX XX
Short Term Borrowings XXX XX
Trade Payables XXX XXX XXX XX

Other Current Liabilities XXX XXX XXXX XX

XXXXX XXX
Short Term Provisions XXX XXX

Total Current Liabilities XXX XXX

TOTAL (i+ii+iii) XXXX XXXX

XXXXXX XXXXX

II ASSETS

i Non-current Assets XXX XX

Fixed Assets XXX XXX XXX XX

Tangible Assets XXX XXX XXX XX

XXX XX
Intangible Assets XXX XXX
XXX XX
Capital work-in-progress XXX XXX

Long Term Loans and XXX XXX

XXX XX
Advances

Other Non-Current Assets

XXX XXX XXX XX
Total -Non-current Assets
XXX XX
ii Current Assets XXX XX
XXX XXX
Inventories
XXX XXX
Trade Receivables XXX XX
XXX XXX XXX XX
Cash and Bank Balances
 XXX XX
Short Term Loans and
Advances XXXX XX
XXX XXX
Other Current Assets
XXX XXX
Total - Current Assets
XXX XXX
TOTAL (i+ii)
XXXXXX XXXXXX

GUIDELINES FOR INTERPRETATION OF BALANCE SHEET:

1.The short-term financial position can be studied by the comparing the working capital of both
years.

2.To study the liquidity position changes in liquid assets must be ascertain if there is any increase
in liquid assets. We must understand that is an improvement in the liquidity position of the
concern and vice versa.

3. A high increase in sundry debtors and bills receivable mean in increase in risk in collecting the
amount of dues.

4. Long term financial position of the business concern car is analysed by studying the changes in
fixed assets, long term liabilities and capital.

5. Fixed assets must be compared with long term loans and capital. If the increase in fixed assets
is more than the increase in long term financiers from the working capital which is not good.

COMMON SIZE FINANCIAL STATEMENTS:

A common size financial statement displays all items as percentages of a common base figure
rather than as absolute numerical figures. This type of financial statement allows for easy analysis
between companies or between time periods for the same company. The values on the common
size statement are expressed as ratios or percentages of a statement component, such as revenue.

While most firms don't report their statements in common size format, it is beneficial for analysts
to compute it to compare two or more companies of differing size or different sectors of the
economy. Formatting financial statements in this way reduces bias that can occur and allows for
the analysis of a company over various time periods, revealing, for example, what percentage of
sales is the cost of goods sold and how that value has changed over time. Common size financial
statements commonly include the income statement, balance sheet and cash flow statement.

Common size Profit and loss a/c:

The income statement also referred to as the profit and loss (P&L) statement, provides an
overview of flows of sales, expenses and net income during the reporting period. The income
statement equation is sales minus expenses and adjustments equals net income. This is why the
common size income statement defines all items as a percentage of sales. The term "common
size" is most often used when analyzing elements of the income statement, but the balance sheet
and the cash flow statement can also be expressed as a common size statement.

FORMAT OF COMMON SIZE PROFIT AND LOSS A/C FOR YEAR

ENDED XX-XX-XXXX

year ended Percentage

Description

Income:
Guest accommodation, food
and beverage
XXX XX
Other revenue XXX XX

XXX XX

Total income
 Expenditure:
Consumption of parovision, XXX XX
beverage and smokes

Upkeep and service cost XXX XX

Employee remuneration and XXX XX

benefits
Administration, selling and XXX XX
other expenses
Profit before interest and XXX XX
depreciation
Less: Profit /loss sale of XX XX
investment
Less: Depreciation XX XX

Net profit for the year XXXX XX

Common size Balance Sheet:

The balance sheet provides a snapshot overview of the firm's assets, liabilities and shareholders'
equity for the reporting period. A common size balance sheet is set up with the same logic as the
common size income statement. The balance sheet equation is assets equals liabilities plus
stockholders' equity. As a result, analysts define the balance sheet as a percentage of assets.
Another version of the common size balance sheet shows asset line items as a percentage of total
assets, liabilities as a percentage of total liabilities and stockholders' equity as a percentage of
total stockholders' equity.

Format of common size balance sheet as on xx-xx-xxxx

PARTICULARS Current year Percentage(%)

EQUITY AND
LIABILITIES

i Shareholders’ Funds

Share Capital
XXX XX
Reserves and Surplus
XXX XX
ii Non-current Liabilities

Long Term Borrowings

XXX XX
Other Long Term Liabilities
XXX XX
Long Term Provisions
XXX XX
Total NCL
XXXX XX
iii Current Liabilities
XXX XX
Short Term Borrowings
XXX XX
Trade Payables
XXX XX
Other Current Liabilities
XXX XX
Short Term Provisions
XXX XX
Total Current Liabilities
XXXX XX
TOTAL (i+ii+iii) XXXXXX 100.00

II ASSETS

i Non-current Assets

Fixed Assets XXX XX

Tangible Assets XXX XX

Intangible Assets XXX XX

Capital work-in-progress XXX XX

Long Term Loans and XXX XX

Advances Other Non-Current
Assets

XXX XX
Total -Non-current Assets

ii Current Assets

XX
Inventories
XXX
XX
Trade Receivables
XXX
XX
Cash and Bank Balances
XXX
XX
Short Term Loans and
Advances XXX

Other Current Assets XX

Total - Current Assets XXX

XX

TOTAL (i+ii) XXX

XX

XXXX 100.00

XXXXXX

RATIO ANALYSIS:

Ratios analysis is one of the powerful tools of the financial analysis. A ratio can be defined as
“the indicated quotient of two mathematical expressions”, and as “the relationship between two
or more things”. Ratio is the numerical or an arithmetical relationship between two figures. It is
expressed where one figure is divided by another. If 4,000 is divided by 10,000, the ratio can be
expressed as;4 or 2:5 or 40%. A ratio can be used as a yardstick for evaluating the financial
position and performance of a concern because the absolute accounting data cannot provide
meaningful understanding and interpretation. A ratio is relationship between two accounting
items expressed mathematically. Ratio analysis helps the analyst to make quantitative judgment
with regard to concern’s financial position and performance. Ratios are the numerical relationship
between two numbers which are related in some manner.

Absolute figures are valuable but they standing alone convey no meaning unless compared
with another. Accounting ratios show inter-relationships with exist among various accounting
data. When relationships among various accounting data supplied by statements are worked out,
they are known as accounting ratios.

DEFINITION:

“Ratios is the relationship or proportion that one amount bears to another the first number
being the numerator and the later denominator”.

-H.G.GUTHMANN

NATURE OF RATIOS ANALYSIS:

Ratio analysis is a technique of analysis and interpretation of financial accounting data.

Calculation of mere ratios does not serve any purpose, unless several appropriate ratios are
analysed and interrelated. The following are the three important steps involved in the ratio
analysis:

1. Selection of relevant data from the financial statement depending upon the objectives of
analysis.

2. Calculation of appropriate ratios from the data.

3. Comparison of the calculated ratios with the ratios of the same firm in the past, or the ratios
developed from projected financial statement or the ratios of competitors firms.

SIGNIFICANCE OF RATIO ANALYSIS:

The major benefits arising from ratio analysis are as follows:

1) Ratio analysis is a very powerful analytical tool useful for measuring performance of an
organization.

2) Ratio analysis concentrates on the interrelationship among the figures appearing in the
financial statements.
3) Ratios make comparison easy. Ratio is compared with the standard ratio and this show the
degree of efficiency utilization of assets etc.

4) Ratio analysis helps the management to analyse the past performance of the firm and to
make further projections.

5) Ratio analysis allows interested parties like shareholders, investors, creditors, government
and analysts to make on evaluation of certain aspects of a firm’s performance.

TYPES OF RATIO ANALYSIS:

Several ratios calculated from the accounting data, can be grouped into various classes
according to financial activity or function to be evaluated. As stated earlier, the parties interested
in financial analysis are short-term and long-term creditors, owners and management. Short term
creditor’s main interest is in the liquidity position or the short-term solvency of the firm. Long
term creditors, on the other hand, are more interested in the long-term solvency and profitability
of the firm. Similarly, owners concentrate on the firm’s profitability and the financial condition.
Management is interested in evaluating every aspect of the firm’s performance. They have to
protect the interests of all parties and see that the firm grows profitably. In view of the
requirement of the various users of ratios, we may classify them into the following four important
categories:-

1) Liquidity Ratio

2) Leverage Ratio

3) Activity Ratio

4) Profitability Ratio

1) LIQUIDITY RATIO:

It is extremely essential for a firm to be able to meet its obligations as they become due. Liquidity
ratios measure the firm’s ability to meet current obligations. In fact, analysis of liquidity needs
the preparation of cash budgets and cash and Funds Flow Statement, liquidity ratios, by
establishing a relationship between cash and other current assets to current obligations provided a
quick measure of liquidity. The firm should ensure that it does not suffer from lack of liquidity,
and also that it does not have excess liquidity. The failure of company to meet its obligations due
to lack of sufficient liquidity, will result in a poor creditworthiness, loss of creditor’s confidence,
 or even in legal tangles resulting in the closure of the company. A very high degree of liquidity is
also bad; idle assets earn nothing. The firm’s fund will be unnecessarily tied up in current assets.
Therefore, it is necessary to strike a proper balance high liquidity and low liquidity. The most
common ratios, which indicate the extent of liquidity or lack of it, are:

a. Current Ratio

b. Quick Ratio

c. Cash Ratio

a. CURRENT RATIO:

The current ratio (CR) is equal to total current assets divided by total current liabilities. This
indicates the extent to which current liabilities can be paid off through current assets.

Current ratio = Current Assets

Current Liabilities

b. QUICK RATIO:

One Key problem with the current ratio is that it assumes that all current assets can be
converted in to cash in order to meet short-term obligations. We know this assumption is highly
untrue. Firms carry current assets, such as inventory and pre-paid expenses which cannot be
converted into cash quickly. To correct this problem, the quick asset ratio (QAR) removes from
current assets less liquid current assets, such as inventory and pre-paid expenses, which cannot
be converted into cash quickly. The quick ratio, also called the acid test ratio, is equal to liquid
current assets, divided by current liabilities. It indicates the extent to which current liabilities can
be paid off through liquid current assets such as cash, marketable securities, and accounts
receivables.

Quick ratio = Current Assets – Inventory

Current Liabilities

c. CASH RATIO:
 The cash ratio goes a step further and examines the ability of the firm to settle short-term
liabilities using only cash and cash equivalents such as marketable securities. In other words, the
cash ratio indicates the extent to which current liabilities can be paid through very liquid assets.

Cash ratio = Cash + Marketable Securities

Current Liabilities

Data analysis and interpretation

ANALYSIS AND INTERPRETATION

COMPARITIVE FINANCIAL STATEMENTS:

Comparative financial statements are designed as to provide time perspective to the

consideration of various elements of financial position embodied in such statements. In these
statements figures for 2 or more periods are placed side by side to facilitate comparison.

Comparative financial statements present the accounting information of the same business unit
for 2 or more accounting periods. In other words comparative financial statements help to study
the financial and operating trends over a period of years.

Both income statement and balance sheet can be prepared in the form of comparative financial
statements.

COMPARATIVE BALANCE SHEET

Balance sheet reflects the financial position of a business concern on a particular date. It does
not reveal the trends in the business over a period say 2 or 3 years, a comparative balance sheet
is prepared. Comparative balance sheet as on 2 or more different dates can be used for
comparing assets & liabilities and findings out increase in those items.

A comparative study of balance sheet will reveal the causes for changes in the financial position
on account of numerous transactions that took place between 2 periods of time in the business.

The comparative balance sheet consists of 2 columns for the original date. A third column is
used to show increase or decrease in various items. Fourth columns containing the percentages
of increase or decrease may be adopted.

 Methodology for analysis of balance sheet:

 In first step change in absolute figures i.e. increase or decrease should be calculated.
 In second step change percentage of change should be calculated by using the following
formula:

Percentage of change = change in amount/base year amount*100

After calculation of percentage of change, interpretation should be made.

Comparative balance sheet for 31-03-16 AND 31-03-17

Description 31-03-16 31-03-17 INCREASE INCREASE

OR OR
DECREASE DECREASE
AMOUNT
Sources of
funds
Current 19,628,123 23,592,086 3,963,963 20.20
Liabilities

Total 19,628,123 23,592,086 3,963,963 20.20

liabilities

Application of
funds
Fixed assets
Depreciation - - - -
Current
assets, loans
&advances
 Inventories 4,513,746 5,392,263 878,513 19.46

Sundry debtors 5,122,348 9,077,515 3,955,167 77.21

Cash and bank 4,262,632 3,731,244 (531,388) 12.47

balances
Loans and 4,214,733 6,396,127 2,181,394 29.78
advances
Inter unit 1,514,664 (1,005,064) (509,600) (33.64)
balances

Total assets 19,628,123 23,592,086 3,963,963 20.20

COMPARITIVE BALANCE SHEET FOR 31-03-17 TO 31-03-18

Description 31-03-17 31-03-18 INCREASE OR INCREASE OR

DECREASE DECREASE%

AMOUNT

Current 23,592,086 14,263,289 (9,328,797) (39.54)

Liabilities
Total liabilities 23,592,086 14,263,289 (9,328,797) (39.54)
Application of
funds
Fixed assets - - - -
Depreciation
Capital work in - - - -
progress
Current assets,
loans
&advances
 5,392,263 4,614,445 (777,818) (14.42)
Inventories
9,077,515 2,425,200 (6,652,315) 73.28
Sundry debtors

Cash and bank 3,731,244 5,335,420 1,604,176 42.99

balances
Loans and
6,396,127 6,281,811 (114,316) 1.78
advances
Inter unit (1,005,064) (4,393,587) 3,388,523 337.14
balances
23,592,086 14,263,289 (7,330,741) (31.07)
Total assets

Description 31-03-18 31-03-19 INCREASE OR INCREASE OR

DECREASE DECREASE%

AMOUNT

Current 14,263,289 24,543,005 (9,328,797) (65.40)

Liabilities
Total liabilities 14,263,289 24,543,005 (9,328,797) (65.40)
Application of
funds
Fixed assets - - -
Depreciation
Capital work in - - -
progress
Current assets,
loans
&advances
 4,614,445 5,995,068 1,380,623 29.91
Inventories
2,425,200 2,432,200 7,000 0.28
Sundry debtors

Cash and bank 5,335,420 4,824,416 511,004 9.57

balances
Loans and
6,281,811 8,562,879 2,281,068 36.31
advances
Inter unit (4,393,587) 2,448,726 6,842,313 155.73
balances
14,263,289 24,543,005 10,279,716 72.07
Total assets

2019-20

particulars 30-09-2019 30-09-2019 Increase or Increase or

decrease decrease %
amount

COMMON SIZE P&L A/C FOR THE YEAR ENDED 32-03-17

 Year ended
Percentage
Description
31-03-17

Income
Guest accommodation, 163,536,896 99.47
food and beverage

Other revenue 874,019 0.53

164,410,915 100.00
Total income

Expenditure
Consumption of 30,953,353 18.83
provision, beverage and
smokes
Upkeep and service cost 37,735,919 22.95

Employee remuneration 26,165,617 15.91

and benefits
Administration, selling 35,999,266 2190
and other expenses
Profit before interest and 33,556,760 20.41
depreciation
Less: Profit /loss sale of 0 0
investment
Less: Depreciation 4,560,152 2.77
Net profit for the year 28,996,608 17.64
COMMON SIZE BALANCE SHEET FOR THE YEAR 2016-17

Description Year ended Percentage

31-03-2017
Sources of funds

a. Share capital

44,521,002 100.00
b. Reserves & surplus

Loan funds
a. Secured loans
b. Unsecured loans
Total liabilities 44,521,002 100.00

Application of funds
Fixed assets
70,437,252 158.21
Gross block

(Less) Depreciation 54,392,765 122.17

16,044,487 36.04
Net block
Current assets, loans
&advances
3,138,844 7.50
Inventories

26,930 0.06
Accured interest

5,844,192 13.12
Sundry debtors

774,524 1.74
Cash and bank balances

Loans and advances 4,938,863 11.09

(Less)Current liabilities 12,592,939 28.28
Net current assets 2,130,414 4.79
Profit & loss a/c
Inter unit balances 26,346,101 59.17
 44,521,002 100
Total assets

COMMON SIZE BALANCE SHEET FOR THE YEAR 2017-18

Description Year ended Percentage

31-03-2018
Sources of funds

a. Share capital

83,339,366 100.00
b. Reserves & surplus

Loan funds
a. Secured loans
b. Unsecured loans
Total liabilities 83,339,366 100.00

Application of funds
Fixed assets
75,954,895 91.14
Gross block

(Less) Depreciation 58,196,392 69.83

17,758,503 21.31
Net block
Capital work in 570,080 0.68
progress
Current assets, loans
&advances
3,138,844 3.76
Inventories

43,333 0.05
Sundry debtors

354,041 0.42
Cash and bank balances

Loans and advances 5,262,313 6.31

(Less)Current liabilities 17,686,987 21.22
Net current assets 1,374,161 1.65
Inter unit balances 66,384,943 79.65
83,339,366 100.00
Total assets