Financial statement analysis Assignment Example | Topics and Well Written Essays - 1500 words

Financial statement analysis - Assignment Example The company aims at creating a great guest love hotel with over 6,76000 hundred rooms in approximate 4600 hotels in one hundreds countries (Intercontinental Hotel Group, 2013). Additionally, the directors report indicates that Intercontinental Hotel and Group provide employment to more than345, 000 people globally for instance, in 2011 the company provided employment opportunities to more than people 7,956 (Intercontinental Hotel Group, 2013). In above connection, the company owns nine brands of distinguished hotels in different countries. Additionally, Intercontinental Hotel and Resort consist of leisure and business hotels operating in more than sixty cities (Intercontinental Hotel Group, 2013). Connectively, the company operates in three basic ways namely; franchising, manager and owned/lease (Intercontinental Hotel Group, 2013). The company further operates an approximate of 3,934 hotels under franchise and 658 hotels under management mode of business operation (Intercontinental Hotel Group, 2013). Additionally, the company has placed a lot of emphasis on franchising mode of business operation (Intercontinental Hotel Group, 2013). ... orne hotel operate as a public limited company and reported a net operating income of one hundred and ninety nine million dollars as at 2011(Millennium Hotel and Resort, 2013). The comprehensive income statement indicates that the company had a net income of one hundred and sixty five million dollars by the end of 2011(Millennium Hotel and Resort, 2013).Connectively, the company operates via an inter-link of various portfolios as well as ensuring there is efficient cost control (Millennium Hotel and Resort, 2013). Connectively, the company operations are highly decentralized making it easier to respond to market demand. The company operates the following brands: Grand Millennium hotel, Capthorne and Kingsgate to name just but a few of the brands (Millennium Hotel and Resort, 2013). 2. Analyze the Operating profit margin (Intercontinental Hotels Group PLC is the main object of analysis, Millennium & Copthorne Hotels PLC is its rival firms, please contrast the two companies). Operating profit margin indicates the amount of revenues/income a company makes after paying its variable overheads (Warren, Reeve, Duchac & Warren, 2012). It is important to not that some items are excluded when computing operating profit margin among the items excluded are; good will amortization, interest to mention just but a few (Vasigh, Fleming & Mackay, 2010). Therefore, operating profit margin may be computed using the formula below; Operating profit margin= Income after tax ? Sales Based on comprehensive income statement for Intercontinental Hotel Group year ended 31st December 2011, 2010, 2009 and 2008 the operating profit margins were 0.29355, 0.2156, 0.171 and 0.19364 respectively (Intercontinental Hotel Group, 2013). This indicates that in 2011 operating profit margin was higher as