ABSTRACT
After studying this chapter, you should have developed an appreciation of
1. How insights can be gained from dissecting ROI into its two underlying
elements: profit margin and asset turnover
2. How a systematic analysis of a hotel’s profit performance can be
conducted through the use of ratios
3. How an analysis of a hotel’s short-and long-term financial stability can
be achieved through ratio analysis
4. How operational ratios can be used as an aid to monitoring the operating
performance of hotels
5. How an aged schedule of accounts receivable can assist the management
of receivables
6. How it is important that an analyst develops the ability to tailor ratios
with due regard to the nature of the hotel under investigation.
