B Constructing balance sheet
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Assignments
Name of assignment
Constructing a balance sheet.
A balance sheet (also known as statement of financial position or statement of financial condition) is a summary of the financial balances of a company. A balance sheet has two sides: assets on the left, and financing on the right, which itself has two parts: liabilities and ownership equity.
The balance sheet is one of the three (income statement and statement of cash flows being the other two) core financial statements used to evaluate a business.
Situation
Being a family hotel, the Bergmans did not care too much about financial statements. Of course, a number of key metrics have been looked at, over the years but a complete balance sheet was never available. In hospitality industry, obviously, having a clear and thorough insight in finances, from a business perspective, is very important. So, there is some information gathered. It seems, though, the hotel has never used the available data to its full potential.
Goal
Diving deeper into the available numbers might bring new insights that could help in analysing the results and so make better decisions for the years to come. Especially a balance sheet could be helpful in this.
Task, deliverable
Analyse the available data on the operating review, and create a balance sheet based on the estimated value of the assets and liabilities of the hotel.
Draw your conclusions and give concrete information to Jill Jandal about the balance sheet you have made.
Assessed elements
- Is the balance sheet complete, does it contain all types of assets, liabilities and equity?
- Are the indicated amounts explainable and logical for a hotel of this size?
- What are your conclusions from the balance sheet and why?
- Are the conclusions, drawn from the balance sheet, correct and concrete?
- Are all the sources accounted for?
Additional information
- Operating review
- What is a balance sheet?
- Reading the balance sheet
- Mind your balance sheet!
- Balance Sheet of Hotel Industry
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