COMENDADOR, Bruce Adrian M.

DABALOS, James Edward T.

DANDAN, Soccoro Nia V.
Engl01S (Group A)
18 September 2017

CONCEPT PAPER

Introduction

This paper will deal with Economics and will focus on selected hotels in Cebu. It will

determine the financial status of selected hotels in Cebu from 2010-2015 specifically on the type

of ownership, years of operation, number of employees, and capitalization.

Rationale of the Study

Everyone knows that money is very important in starting and running a business. Without

it, businesses will cease to exist. So it is very important for a business to be financially stable and

to grow. Well, Cebu is also known for its Hospitality Industry. In this study, the researchers

talked about forecasting that a business can use to ensure that they can deal with problems and

make sure that they can still operate in the long run. Forecasting is used to predict the future

events or outcomes based on the past and this may help the company to know where they stand

in the business industry. The financial section includes the balance sheet, the cash flows, and

income statement. These statements will be used to project and to forecast the possible outcome

in the strategies used. Hotels are the main subject in this study. Among the numerous hotels in

Cebu, the researchers only chose the three (3) selective hotels which can make people/tourists

stay here more extraordinary. Also, most of the best hotels here have beaches or a resort which

makes it more tourist-friendly.

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 Hotels need to perform financially well. Most of the hotels, just like any other businesses,

rely on the most effective forecasting method to predict future happenings in the financial section

so they can avoid the things that will make their profit low or unstable and also to manage their

business properly and for it to be more profitable and financially stable. To be financially stable

and to make your company grow, strategies are used too. Financial stability is important for it

also indicate whether a business is doing good or can still cope up with the problems or

uncertainties they face. Hotels might forecast many problems that may be solved by financial

strategies. Also, managers in hotels might encounter a situation where the cash resources are

insufficient to finance investments. Forecasting the possible outcome is important for it can be a

way to avoid loss in a business. When we say forecasting, it means we should look at the

historical data of the company specifically in sales data and market trends that can help predict

the short term and long term business performance. The researchers chose this topic because they

might be able to understand why hotels are also in need of having a better financial performance.

Change is constant, hotels need to adapt in those changes, use strategies or formulate a new and

better strategy to be more productive, to be stable and to improve financially for a better

performance. In this new era, businesses are more competitive and are using more advanced

technologies. Through this research, the researchers compared the past transactions and were

able to predict the future outcomes. Not only for hotels, but it is also applicable in other

businesses. That is why this study was chosen by the researchers.

According to Wyss (1998) forecasting has a huge role in making a budget for the next

year, set some goals that are helpful in the growth of the company or even making new financial

strategies to gain more profit. Most professional financial executives work better with an expert

financial forecaster. The forecasts affect most of the budget decisions. It is believed that

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forecasters are not biased in making their forecast, it is not for their own good and the companys

good. They are just doing their job or they are just a disinterested party unlike for example, if

you ask a broker for an advice to something, they will make sure that they can maximize their

profit rather than maximizing your profit. Another importance of forecasting is that it may help

you in identifying future risks and will be able to avoid it before you experience it. The company

might have to move quickly before it happens. Knowing ahead is better than knowing nothing so

you might be able to know how serious the risk is.

For Marcus (2016), the financial sector of the company is one of the areas the managers

should keep things work smoothly. Finances have greater impact in the company than everything

else. It is the most important thing the managers should attend to what they have forecasted and

they must be prepared to face the consequences of tracking the cash flows of the company. Also,

this is where the financial strategies are used. This can be a help in the financial performance of a

company.

Statement of the Problem

1. What are the hotels profiles in terms of:

1.1. Type of Ownership

1.2. Years of Operations

1.3. Number of Employees

1.4. Number of Branches

1.5. Capitalization

1.6. Customers segmentation

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 2. What is the financial performance of the hotels in terms of:

2.1. Financial Ratio

2.2. Vertical / Common Size Analysis

2.3. Horizontal Analysis

2.4. Du Pont

3. What is the forecasted financial statement for the next five years of the 3 hotels in terms

of:

3.1. Income Statement

3.2. Balance Sheet

3.3. Cash Flows

4. What are the factors that contributed to the increase or decrease of the hotels profitability?

Methodology

The researchers picked respondents from the selected hotels in Cebu City namely

Mactan, Shangri-Las Resort and Spa, Waterfront Cebu City Hotel and Casino and Holiday Plaza

Hotel. This study gave emphasis to different sampling techniques, the instrument used, the

validation of the instrument in order to collate and evaluate the data in accordance to the goal of

the study which is to assess the financial performance of a hotel that affects the stability and

growth.

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 To be able to gather the necessary data, the researchers used the descriptive and

comparative method to compare the financial performance among the selected hotels in Cebu.

The survey questionnaire is limited to questions made by the researchers to explain further.

These questions helped the researchers to get the necessary data related and needed for the study.

Sampling

A purposive sampling will be used as participants of the study which were the financial

managers or any authorized personnel who provided information about the financial performance

of their organization.

Participants

The researchers used the purposive sampling in determining the target respondents for

this study which were the financial managers or any authorized personnel who provided

information about the financial performance of their organization of Mactan, Shangri-Las Resort

and Spa, Waterfront Cebu City Hotel and Casino and Holiday Plaza Hotel. They were chosen as

our respondents to this study since they have the capacity and knowledge to answer the questions

and provide the necessary data needed to gather in this study. The researchers asked these hotel

representatives to answer survey questions that would answer some vital questions that the

researchers would like to know from them. This allowed the researchers to have an idea of the

financial performance of the hotel.

Materials

The study was conducted through visiting the selected hotels in Cebu. A well-structured

interview was made to gather the data needed. The interview questionnaire tend to collect data

about how that certain hotel cope up with challenges in terms of financial stability and how they

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coped up with financial uncertainty. Also, it tends to collect both qualitative and quantitative data

that were used to support answering the objectives of the study.

Procedure

The researchers gathered relevant data in order to achieve a well-understood study. In this

study, the researchers accessed the different statements of the three selected hotel from their

company website and from the Securities and Exchange Commission.

All the data that was interpreted and presented through using tables show the relationship

of the variables and was used to be able to come up with the conclusions and recommendations

for the study.

Analysis of Data

The data gathered will be compared and analyzed through Ratio analysis. This will be

done to get financial information of a company about financial statements and compare it. The

profitability ratios used in the study were the gross profit, return on sales, return on assets, and

return on stockholder equity. To get the data, equations are used; Gross Profit Rate is equal to the

Gross Profit over Net Sales, Return on Sales is equal to the Net Income over Net Sales, and

Return on Sales is equal to the Net Income over the Average Total Assets.

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