QUESTION 1 Harvey's Point Limited operates a hotel in County Donegal and the following are its...

  

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QUESTION 1 Harvey's Point Limited operates a hotel in County Donegal and the following are its results for the last three years with its year end being 31 December: Revenue increase/ (decrease) Non-Current Assets increase Gross Profit Margin Net Profit Margin Return on Capital employed Current ratio Acid ratio Debt to Equity ratio Dividend Cover Required: (a) (b) (c) 2018 (5%) 40% 60% 23% 12% 1.4:1 0.6:1 50% 4 times 2019 4% 10% 61% 25% 15% 1.6:1 1.0:1 44% 8 times 2020 12% 2% 66% 21% 10% 1.8:1 0.9:1 43% 10 times Using all of the above information, critically analyse the performance of Harvey's Point Limited for the period 2018 to 2020. (15 marks) Identify and critically analyse the main advantages of ratio analysis as a means of assessing the financial performance of a business. Comment on the use of the Gross Profit Margin to the service industry. (5 marks) (5 marks) Total (25 marks) QUESTION 1 Harvey's Point Limited operates a hotel in County Donegal and the following are its results for the last three years with its year end being 31 December: Revenue increase/ (decrease) Non-Current Assets increase Gross Profit Margin Net Profit Margin Return on Capital employed Current ratio Acid ratio Debt to Equity ratio Dividend Cover Required: (a) (b) (c) 2018 (5%) 40% 60% 23% 12% 1.4:1 0.6:1 50% 4 times 2019 4% 10% 61% 25% 15% 1.6:1 1.0:1 44% 8 times 2020 12% 2% 66% 21% 10% 1.8:1 0.9:1 43% 10 times Using all of the above information, critically analyse the performance of Harvey's Point Limited for the period 2018 to 2020. (15 marks) Identify and critically analyse the main advantages of ratio analysis as a means of assessing the financial performance of a business. Comment on the use of the Gross Profit Margin to the service industry. (5 marks) (5 marks) Total (25 marks)

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Analysis of Ratios in the order given in the question a Revenue After a decline in 2019 revenues hav... View the full answer