case two European hotel groups

2268 words 10 pages
CASE: TWO EUROPEAN HOTEL GROUPS

CONTENT
1
Financial statements ........................................................................................................................ 3

1.1 Impact of operating leases ............................................................................................ 3 1.2 Depreciation rates ......................................................................................................... 3 1.2.1 Accor ...................................................................................................................... 3 1.2.2 NH
…show more content…

The problem is that these different categories each have different depreciation rates.
Secondly, Accor and NH Hoteles compete in the midscale segment of the hotel business. For this segment Accor applies an estimated useful life of 50 years, while NH Hoteles applies an estimated useful life of 33 to 50 years. It is notable that this is a difference of 17 years for some of NH Hoteles’ hotels. Due to the lower estimated useful life, NH Hoteles will have higher depreciation expenses. This will result in lower earnings, in lower net book value and lower net profit.

1.3 Bad debt percentages
We calculate the bad debt percentage as the portion of provisions in trade receivables.

1.3.1

Accor

(in millions €):


1.3.2

2005:67/1,575= 4.2539%
2004:70/1,342= 5.2906%
NH Hoteles

(in thousands €):


1.3.3

2005: 11,228/141,584= 7.9303%
2004: 11,042/92,467= 11.9416%
Conclusion

We can see that NH Hoteles has a much higher bad debt percentage than Accor. This means that risk of non-payment is higher for NH

Related

  • European Eonomis: Report Regarding the Potiential of Lily O’brien’s Chocolates to Expand Its Operations Into Eu Markets
    2634 words | 11 pages
  • Comprehensive Strategic Plan of Ihg
    3793 words | 16 pages
  • Hotel Rwanda Rwanda Reaction Paper
    1026 words | 5 pages
  • The Future of Theme Parks in International Tourism
    4406 words | 18 pages
  • Boutique hotel
    7085 words | 29 pages
  • Shangri-La
    2322 words | 10 pages
  • Club Med (B) Case Study
    2979 words | 12 pages
  • La Guinguette
    2253 words | 10 pages
  • Expedia, Marketing Strategy
    5957 words | 24 pages
  • HOSP 594
    1260 words | 6 pages