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 SAL Case Analysis Dec 2017

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Admin
Admin


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PostSubject: SAL Case Analysis Dec 2017   Sat Dec 09, 2017 10:22 am

Discussions
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Admin
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PostSubject: Re: SAL Case Analysis Dec 2017   Sun Dec 10, 2017 11:00 pm

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ajithmadduma



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PostSubject: Re: SAL Case Analysis Dec 2017   Mon Dec 11, 2017 11:34 am

Thanks sir..
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wasantha83



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PostSubject: 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



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PostSubject: 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



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PostSubject: 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
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PostSubject: Re: SAL Case Analysis Dec 2017   Tue Dec 12, 2017 3:57 pm

Please find attached last week PPT.


https://drive.google.com/file/d/1U6czIhNPUEqCU1Fhnrm1DQFwL9ze1uqt/view?usp=sharing

Strategic discussion in detail will happen next week.
Please complete your own SWOT for SAL
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Admin
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PostSubject: 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


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PostSubject: Re: SAL Case Analysis Dec 2017   Sun Dec 17, 2017 10:20 am

Please find below files relating to yesterdays discussion:

PPT
https://drive.google.com/file/d/1AlVdYXDzNHWA-jaeX99-KB6rnlfW6JhR/view?usp=sharing

Excel
https://drive.google.com/file/d/19bOaneoGbabHkjs4w56gAkcyXMD4vTa3/view?usp=sharing

Additional information,if any, will follow soon.

As discussed please post your comments/discussion points here.
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Admin
Admin


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PostSubject: 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



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PostSubject: 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


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PostSubject: Re: SAL Case Analysis Dec 2017   Tue Dec 19, 2017 8:43 am

Hi All,

Please find below news paper articles relating to Anilana.

https://drive.google.com/file/d/11d9ebRhSLWcANUBjoMZ9Eo1CGZy-d9aw/view?usp=sharing

Please go through them to get an idea only. Don't try to apply it directly as examiner may think of a different scenario in his unseen.
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Asela489



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PostSubject: 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



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PostSubject: 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
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PostSubject: 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


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PostSubject: 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



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PostSubject: 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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PostSubject: 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



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PostSubject: 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



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PostSubject: 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



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PostSubject: Re: SAL Case Analysis Dec 2017   Wed Dec 20, 2017 7:52 am

http://www.ft.lk/travel-tourism/TripAdvisor-insights-on-next-growth-phase-for-SL-tourism/27-645576

TripAdvisor insights on next growth phase for SL tourism (Daily FT)
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rmnihad



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PostSubject: 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



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PostSubject: 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



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PostSubject: Re: SAL Case Analysis Dec 2017   Wed Dec 20, 2017 12:48 pm

Dear Sir,
Institute has issued new corporate Governance Code Dec 2017.
https://www.casrilanka.com/casl/images/stories/2017/2017_pdfs/code_of_best_practice_on_corporate_governance_2017_final_for_web.pdf

Should we apply this new code or 2013 code.Pls advise.
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Nirosha Gayani



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PostSubject: 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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