Discussion Questions–Abu Dhabi National Hotels:
1) Prepare a trend analysis of all financial statements in Exhibit 3 using 2007 as the base year. Interpret the analysis. What are your main observations?
2) What are the strengths and weaknesses of ratio analysis? What are its inherent limitations? When is it more likely to be useful? Calculate ADNH Profitability, Efficiency, Liquidity, and Leverage Ratios (focus on the ones we discussed in class). Perform DuPont De-Composition and interpret it. Comment on time trends in ratios.
3) Why is segment analysis useful? Find a section of the Accounting Standards Codification that provides guidance for segment disclosure. Demonstrate in class how you searched for it.
4) Calculate ratios in step (2) on segment level. How does it help your conclusions about the company?