College Paper Lab

introduce the finance statement according to a consolidated income statement- College Paper Lab | collegepaperslab.com

Discuss the factors that must be taken into account when providing a context for analysing the financial performance of a business. (15 marks)
The following are extracts from the 2019 published financial statements of City-Hotels Group Plc., an international hotel and leisure company.



					City-Hotel Group Plc.
		Consolidated Income Statement for year ended 31 December 2019
						2019		2018
						â‚¬’000		â‚¬’000

	Revenue					112,200		93,400
	Cost of sales					(51,300)		(44,700)
	Gross profit					60,900		48,700
	Selling and administrative expenses					(25,400)		(21,500)
	Depreciation and amortisation					(6,400)		(5,600)
	Operating profit					29,100		21,600
	Loan interest					(8,400)		(5,400)
	Profit before tax					20,700		16,200
	Corporation tax					(2,500)		(1,800)
	Profit for the year					18,200		14,400

	Dividends paid					(7,600)		(5,400)


				City-Hotels Group Plc.
			Consolidated Balance Sheet at 31 December 2019
						2019		2018
						â‚¬’000		â‚¬’000
	ASSETS
	Non-current assets
	Property, plant & equipment (net book value)					301,300		240,600
	Intangible assets					17,500		10,400
						318,800		251,000
	Current assets
	Inventories					2,900		2,400
	Accounts receivable					5,600		4,900
	Prepayments					4,400		4,100
	Cash and Bank					9,800		7,800
						22,700		19,200

	Total assets					341,500		270,200

	EQUITY
	Issued share capital (note 1)					7,200		6,500
	Share premium					39,100		17,700
	Revaluation reserve					84,500		84,500
	Other reserves					2,600		2,200
	Retained earnings					47,500		36,900
						180,900		147,800
	LIABILITIES
	Non-current liabilities
	Loans and borrowings					130,900		96,700
	Current liabilities
	Trade payables					5,700		4,400
	Accrued expenses					9,200		8,900
	Bank overdrafts					2,700		2,600
	Short term loans and borrowings					10,700		8,700
	Corporation tax liabilities					1,400		1,100
						29,700		25,700

	Total Liabilities					160,600		122,400

	Total equity and liabilities					341,500		270,200

	Additional Information, note 1:
	Nominal (par) value per share in â‚¬cent					25	c	25	c
	Market price / share, year-end, â‚¬cents					930	c	750	c

	Required:

Calculate, for each year, 18 ratios under the headings of profitability, Use of assets, capitalstructure, liquidity and investment(60 marks)


(b)Based on (a), comment on the company’s performance and position over the two years (70 marks) c Apply the Taffler & Tisshaw model of business failure prediction and calculate a z-score for the business for both 2019 and 2018 (20 marks d Comment on your answers to (c)(10 marks) e Accounting statements are often accused of presenting a limited picture of a business. In the context of this statement discuss the limitations of ratio analysis.(25 marks)

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