| SAL Case Analysis Dec 2017 | |
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+17roshan.daniel sanjayap Mark_Ravin rmwbandara Nirosha Gayani Sandaruwan Dinesh lasanthamadushan Sandamini rmnihad ruwanthacooray Asela489 Prasadini Admin Shameela wasantha83 ajithmadduma 21 posters |
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Admin Admin
Posts : 189 Join date : 2016-02-29
| Subject: SAL Case Analysis Dec 2017 Sat Dec 09, 2017 10:22 am | |
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Admin Admin
Posts : 189 Join date : 2016-02-29
| Subject: Re: SAL Case Analysis Dec 2017 Sun Dec 10, 2017 11:00 pm | |
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ajithmadduma
Posts : 2 Join date : 2017-09-18
| Subject: Re: SAL Case Analysis Dec 2017 Mon Dec 11, 2017 11:34 am | |
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wasantha83
Posts : 1 Join date : 2017-09-18
| Subject: Re: SAL Case Analysis Dec 2017 Mon Dec 11, 2017 12:58 pm | |
| Sir,
Can you send us yesterday presentation | |
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Shameela
Posts : 4 Join date : 2017-09-05
| Subject: Re: SAL Case Analysis Dec 2017 Mon Dec 11, 2017 6:30 pm | |
| Hello Sir,
Can U please share the yesterday's session slides with us.
Shameela | |
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ajithmadduma
Posts : 2 Join date : 2017-09-18
| Subject: Re: SAL Case Analysis Dec 2017 Tue Dec 12, 2017 12:46 pm | |
| dear Sir
Can you share the last lass's session slides
Thanks | |
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Admin Admin
Posts : 189 Join date : 2016-02-29
| Subject: Re: SAL Case Analysis Dec 2017 Tue Dec 12, 2017 3:57 pm | |
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Admin Admin
Posts : 189 Join date : 2016-02-29
| Subject: Re: SAL Case Analysis Dec 2017 Tue Dec 12, 2017 4:00 pm | |
| Key Ratios:
Occupancy - # of occupied rooms / # of available rooms
ARR / ADR - Total room revenue / # of occupied rooms
RevPar (Revenue per available room) - Total room revenue / # of available rooms
TrevPar (Total revenue per available room) - Total revenue / # of available rooms
Other costs/Ratios
Food cost Beverage cost Staff to room Energy cost GP margin
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Admin Admin
Posts : 189 Join date : 2016-02-29
| Subject: Re: SAL Case Analysis Dec 2017 Sun Dec 17, 2017 10:20 am | |
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Admin Admin
Posts : 189 Join date : 2016-02-29
| Subject: Re: SAL Case Analysis Dec 2017 Sun Dec 17, 2017 10:33 am | |
| Please note that excel file has three sheets 1 Analysis 2.Formula and 3. Question | |
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Prasadini
Posts : 1 Join date : 2017-09-04
| Subject: Re: SAL Case Analysis Dec 2017 Mon Dec 18, 2017 6:48 pm | |
| Dear Sir, Can you please upload the word document of Anilana hotel. | |
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Admin Admin
Posts : 189 Join date : 2016-02-29
| Subject: Re: SAL Case Analysis Dec 2017 Tue Dec 19, 2017 8:43 am | |
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Asela489
Posts : 1 Join date : 2017-09-05
| Subject: Re: SAL Case Analysis Dec 2017 Tue Dec 19, 2017 9:37 am | |
| Dear Sir,
What are the effecs of unaccounted interest, Penalty charges and Dishonoured customer cheques on P&L and Balance Sheet?
Have We to adjust the effet to the P&L Balance sheet and get the final P&L and balance sheet for calculation?
Thanks | |
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ruwanthacooray
Posts : 2 Join date : 2017-12-13
| Subject: Re: SAL Case Analysis Dec 2017 Tue Dec 19, 2017 12:07 pm | |
| I think we cant use the WACC given in the Pre-seen which is 12% , since it was the WACC as at 31.03.2012.Now almost 5 years gone. Therefore there can be a possibility that we need to compute the WACC at the examination . | |
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Admin Admin
Posts : 189 Join date : 2016-02-29
| Subject: Re: SAL Case Analysis Dec 2017 Tue Dec 19, 2017 6:17 pm | |
| - Asela489 wrote:
- Dear Sir,
What are the effecs of unaccounted interest, Penalty charges and Dishonoured customer cheques on P&L and Balance Sheet?
Have We to adjust the effet to the P&L Balance sheet and get the final P&L and balance sheet for calculation?
Thanks Yes. You have to adjust it | |
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Admin Admin
Posts : 189 Join date : 2016-02-29
| Subject: Re: SAL Case Analysis Dec 2017 Tue Dec 19, 2017 6:21 pm | |
| - ruwanthacooray wrote:
- I think we cant use the WACC given in the Pre-seen which is 12% , since it was the WACC as at 31.03.2012.Now almost 5 years gone. Therefore there can be a possibility that we need to compute the WACC at the examination .
Yes, a valid point. There is a possibility that examiner requires you to calculate it. | |
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Shameela
Posts : 4 Join date : 2017-09-05
| Subject: Re: SAL Case Analysis Dec 2017 Tue Dec 19, 2017 6:32 pm | |
| Hello Sir,
Can you please assist on the determination of year 0 & year 1 (Eg :31/03/2020 , whether it is going to be Year 0/1 ) . It would be useful to proceed with the Free Cash flows.
Also do u think APV (Adjusted Present Value Approach will have any effect on SAL.
Thanks | |
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Admin Admin
Posts : 189 Join date : 2016-02-29
| Subject: Re: SAL Case Analysis Dec 2017 Tue Dec 19, 2017 6:36 pm | |
| - Shameela wrote:
- Hello Sir,
Can you please assist on the determination of year 0 & year 1 (Eg :31/03/2020 , whether it is going to be Year 0/1 ) . It would be useful to proceed with the Free Cash flows.
Also do u think APV (Adjusted Present Value Approach will have any effect on SAL.
Thanks Please check the excel sheet for question one. I need to check question 2. | |
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rmnihad
Posts : 14 Join date : 2017-02-25
| Subject: Re: SAL Case Analysis Dec 2017 Wed Dec 20, 2017 1:22 am | |
| Dear All, Below SWOT is done by me. Appreciate your comment and add anything I missed
SWOT for SAL Strengths 1. Business connection through Mr. Gregory 2. Business connection through Mihiri and her company 3. Mr. Athula is entrepreneur with proactive mindset and more than 20 years of experience in stock market, finance, and hospitality 4. Having an experienced investment advisor cum stock broker – Mr. Derric 5. Ownership of prime beachfront lands 6. Well recognized global hospitality industry experienced CEO (Mr. Richard)
Weaknesses/Issues 1. Delay in construction of hotels with cost escalation 2. Poor financial performance of the company 3. Collapse of market price of the company and shareholder disappointment 4. High level of financial gearing 5. Business plan made by inexperienced new graduates 6. Mr. Richard is well known and well experienced in hospitality operations but he has undertaken architect and contraction planning work of SAL which is beyond his capacity 7. Marketing aspect is handled by new graduate with no experiences 8. Absence of policy for revaluation of properties and it was done without following relevant accounting standards 9. No proper and clear procedure for selecting constructors 10. No proper investment strategy/policy for the company 11. Upfront lease payment for 15 years for Kandy bungalow is not acceptable 12. Company does not have proper HR strategy, especially for recruitment, selection and development 13. Imbalanced Audit/Remuneration/Nomination committees 14. Removal from Booking.com /TripAdvisor 15. Loss of discount and credit facility from suppliers 16. Dependency on daily cash collection from the guests 17. Poor financial management (no clear policy for funding for investment and working capital 18. Complain from guests about poor quality services and facilities 19. Staffs are looking out for new job
Opportunities 1. Niche market such as MICE 2. Short stay low spend tourists and transits travelers 3. Health tourism 4. Education tourism 5. Adventure tourism 6. Hotels with shopping malls
Threads 1. Upcoming big players such as Shagari La, ITC etc. 2. Price competition among hotel operators 3. Growing informal sector and alternative accommodation models 4. Resistance from cultural and social activists
As a restructuring exercise, SAL can implement turnaround strategy as below
Crisis stabilization Reducing cost through improving productivity and increasing revenue with new marketing mix
Management change Currently, in the event of the resignation of Mr. Richard, there is no succession plan for New CEO for SAL. It is very important to appoint an experienced person with turnaround management as a CEO.
Communication with Stakeholders To turnaround of SAL, it requires support from all stakeholders including suppliers, fund providers, and employees etc. it is vital SAL to carry out stakeholder analysis and identify key stakeholders and keep them informed and managed.
Financial restructuring SAL should think of alternative financing methods other than debts and best option to be selected (We can givem more detail based on Unseen material detail) | |
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Sandamini
Posts : 4 Join date : 2016-03-10
| Subject: Re: SAL Case Analysis Dec 2017 Wed Dec 20, 2017 4:41 am | |
| Dear. Sir,
Can we prepared Business Process Reengineering and restructuring models? Restructure and retrenchment both needed? Retrenchment include in stdy pack.
Last edited by Sandamini on Wed Dec 20, 2017 7:56 am; edited 1 time in total | |
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lasanthamadushan
Posts : 2 Join date : 2016-09-18
| Subject: Re: SAL Case Analysis Dec 2017 Wed Dec 20, 2017 7:52 am | |
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rmnihad
Posts : 14 Join date : 2017-02-25
| Subject: Re: SAL Case Analysis Dec 2017 Wed Dec 20, 2017 10:15 am | |
| Dear All, Can anyone give some insight on financial reporting and accounting standard on revaluation of properties and method they have mentioned in pre-seen? | |
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Dinesh
Posts : 2 Join date : 2017-09-04
| Subject: Re: SAL Case Analysis Dec 2017 Wed Dec 20, 2017 10:37 am | |
| 1.2.1. Deficiencies in Current Business Strategies
a) Partnering with Credit Card Companies;
Given the current context of low occupancy of SAL, encouraging customers to become consistent customers by offering discounts, rewards, and benefits by way of partnering with Credit Card Companies is a good initiative to boost the occupancy levels. Nevertheless advertising of those offers is an essential tool in order to make pursued of guests. Apparently when partnering with Credit Card Companies mainly there are two factors that need to be considered. - Who is bearing the loss arising from Discounts given?
Given the context of low bargaining power of SAL due to the current bad performance and reputation, the reduced price will have to be borne by the Hotel.
- When such offers are given?
During off season to attract the locals, when there are less foreigners coming to Sri Lanka, is preferred at least to cover-up fixed costs as well as to build up the brand name which currently has been deteriorated.
However when liked to SAL’s mission of attracting high-end customers whiling offering discounts on credit cards are somewhat opposing to the strategic direction of the SAL Hotels.
Guys comment on it. | |
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Sandaruwan
Posts : 2 Join date : 2016-09-15
| Subject: Re: SAL Case Analysis Dec 2017 Wed Dec 20, 2017 12:48 pm | |
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Nirosha Gayani
Posts : 4 Join date : 2016-09-11
| Subject: Re: SAL Case Analysis Dec 2017 Wed Dec 20, 2017 6:35 pm | |
| Hai friends,
Athula and his team of newly recruited graduates are created mission statement stating that their target market is up market tourists without considering that Sri Lanka has positioned as chief destination and per capita tourist receipts per day is only US$ 168.2. I think this is main reason for the SAL's low occupancy and low cash flow What do you think ? | |
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