Reference no: EM13946408
1. The Kaline Hotel has the following computed financial ratios and information for 2015 and 2016 (4 pts):
2015 2016
Current ratio 1.35 1.89
Acid-Test ratio 0.64 0.26
Inventory Turnover 5.4 times 4.8 times
Debt / Equity ratio 2.5 1.8
Interest coverage 2.8 2.1
Profit Margin 9.2% 9.8%
Operating Efficiency ratio 27% 23.9%
ADR $40.57 $45.70
REVPAR $30.56 $28.51
a. Compare the liquidity situation of the two years. Did its liquidity improve or deteriorate in 2016? Why?
b. Compare the hotel's solvency over the two years. Was the hotel more or less solvent in 2016? Why?
c. Compare the performance of the management in terms of profitability. Did it improve or deteriorate in 2016? Why?
d. Compare the room operation of the two years. Did it improve or deteriorate in 2016? Why?
2. The following information applies to the Sunshine Restaurant (4 pts):
Total revenue $300,000
Assets turnover 0.5
Profit margin 12%
Return on equity 20%
Assume all the balance sheet items are averages.
Calculate items below: (You must show your work)
a. Total assets
b. Net income
c. Equity
d. DE ratio
3. Jim Jones, the owner of Jim's Place, wants to analyze labor costs in his restaurant operations and has asked you to for assistance. The operating statistics for the previous year are as follows:
MonthNumber of CustomerLabor Costs
January 2,200 $10,500
February 2,300 10,650
March 3,700 18,500
April 4,450 19,000
May 4,400 19,000
June 4,800 20,250
July 4,900 20,400
August 5,400 21,000
September 3,800 18,000
October 3,100 15,500
November 2,900 15,250
December 3,000 16,650
Requirements:
a. Using the high/low two-point method, determine the variable cost per customer.
b. What is the monthly fixed labor cost?
4. Your total income is $60,000. The tax rate is as follows: (2 pts)
} Taxable income Tax rate
} <$20,000 10%
} 20,000 - 50,000 20%
} > 50,000 30%
a. How much income tax would be owed?
b. What % tax was paid?