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Cinnamon Hotels and Resorts PLC

The document provides an executive summary of an analysis that will be performed on Cinnamon Hotels and Resorts plc. The analysis will include calculating profitability, liquidity, and solvency ratios to evaluate financial performance, as well as investor ratios, working capital, sources of finance, and an investment appraisal of a proposed project. It will consider the financial impacts on various stakeholder groups and provide recommendations.

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208 views4 pages

Cinnamon Hotels and Resorts PLC

The document provides an executive summary of an analysis that will be performed on Cinnamon Hotels and Resorts plc. The analysis will include calculating profitability, liquidity, and solvency ratios to evaluate financial performance, as well as investor ratios, working capital, sources of finance, and an investment appraisal of a proposed project. It will consider the financial impacts on various stakeholder groups and provide recommendations.

Uploaded by

Bajalock Virus
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Cover Page

1
Executive Summary

Throughout this report, I will consider Cinnamon Hotels and resorts plc as the chosen company
and will perform a thorough analysis over the company’s financial statements. The access to the
company’s annual reports would be gained from its official website
(cinnamonweb.blob.core.windows.net, 2022). Starting off I will calculate the firms Profitability,
Liquidity and Solvency ratio’s effectively and provide brief descriptions under each sub headed
ratio’s and evaluate the entity’s financial performance.

Moving on there will also be account for the firm’s investor ratio’s such that it assists in
understanding the entity’s investor relationships and how effectively it has managed to balance
its share price with or without fluctuating significantly for the worse turn. As such I will also
provide recommendations on improving ratios which lack effective performance.

As per the question requirement I will analyze the firms Financial performance in relation to
specific groups of stakeholders and the effect that would be caused upon them. Next, I will
provide a brief discussion upon the type of organization that the selected entity had adopted to
and how it differs from other types of organizations that exists. Moving on, there will be a
working capital calculation and will be compared with the prior years and comments provided on
their WC performance and how this differs from the organizations working capital cycle(WCC).
There would also be meaningful recommendations on improving the company’s Working capital
performance. Thereon, I will compare and contrast the sources of finance tat cinnamon hotels
and resorts plc has opted to and finally also provide recommendations on which one would be
the best option both to the short term and long-term financing requirements.

Moving on to the end of the report, there will be a meaningful investment appraisal process
conducted in order to appraise a large investment project that is to be undertaken by the selected
organization. This calculation would consist of popular and reliable investment appraisal
tecdhni9qures such as the Accounting rate of return, Payback period, Net Present Value (NPV)
and the Internal Rate of Return (IRR). And conclude the report with recommendations if the
company should move on with the project provided the Current financial position of them and
emphasizing on the Non-financial Factors which needs to be taken into account before reaching
any final; conclusion on the Proposed project (CSE.lk, 2022).

2
Introduction

Both the Sri Lankan and Maldivian branches of the Cinnamon Hotels & Resorts chain provide a
variety of accommodations. John Keells Holdings PLC, of which it is a part, is the largest listed
conglomerate in Sri Lanka, having holdings in a wide variety of industries, including tourism,
shipping, real estate, fast food, banking, technology, plantations, and retail
(www.cinnamonhotels.com, 2022).

On November 14th, 2005, during World Travel Market in London, the first hotel of a renowned
hotel network bearing a name inspired by a spice closely associated with Sri Lanka opened its
doors. It's emblematic of a journey that, in its own right, is every bit as exotic, intriguing, and
enticing as the dangerous expeditions of past. The Cinnamon name is synonymous with a new
kind of hotels that go above and beyond to meet their guests' expectations. Comfort, creativity,
discovery, and inspired living are hallmarks of Cinnamon Hotels & Resorts, assuring guests of
the brand's signature Sri Lankan hospitality (linkedin.com, n.d.).

The history, location, culture, and traditions of each hotel give it its own distinct personality.
Each resort is an adventure in and of itself, from rustic beach cabins in Sri Lanka to opulent
water villas in the Maldives.

The hotel group operates a total of 14 establishments, including three in Colombo's downtown,
eight in various resort areas in Sri Lanka, and four in the Maldives.

Taste what it's like to live a life that's truly inspired with Cinnamon (www.cinnamonhotels.com,
n.d.).

3
Profitability ratios

Profitability ratios are important indicators of a company’s profitability. These ratios show how
much money the company is making from its overall operations, including its revenue, expenses,
and net income. Profitability ratios can be used to judge a company’s health and performance.
They can also be a useful guide for calculating a company’s value (Investopedia.com, 2022).

A company’s profitability ratios can be affected by many factors. Revenue and expense numbers
can be volatile, and changes in these figures can impact a company’s profitability ratio. For
example, a company with higher expenses relative to its revenue may see its ratio decline.
Conversely, a company with higher revenue may see its ratio increase.

Gross profit margin ratio

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