Question

1. Conduct a vertical analysis (common-size analysis) for the income statements of Boatman Hotel for the months ended March 31 and April 30, 2016.

	March	April
Revenues:
Rooms	375,236	425,105
Food and Beverage	186,253	176,523
Telecommunications	4,213	5,326
Other Income	46,879	49,654
Total Revenues
Cost of Sales:
Rooms	130,256	154,987
Food and Beverages	142,516	135,216
Telecommunications	3,453	4,123
Other Income	35,648	41,213
Total Cost of Sales	311,873	335,539
Gross Profit:
Rooms	244,980	270,118
Food and Beverages	43,737	41,307
Telecommunications	760	1,203
Other Income	11,231	8,441
Total Gross Profit
Operating (Controllable) Expenses:
Administration & General	11,605	18,256
Marketing	41,219	44,362
Franchise Fees	21,005	24,032
Property Operations and Maintenance	37,456	38,612
Utilities	32,156	36,459
Total Operating Expenses	143,441	161,721
Operating Income
Other (Non-controllable) Expenses:
Management Fee	6,145	6,425
Property Taxes	25,613	25,613
Reserve for Capital Improvements	18,321	20,153
Insurance	6,901	6,852
Interest Expense	75,004	78,450
Total Non-controllable Expenses	131,984	137,493
Income Before Income Taxes

Answer 1

Income Statement March Revenues 612581 Less: Cost of Sales 311873 Gross Profit 300708 Less: Operating Expenses 143441 Operating Profit 157267 Less: Non-controllable Expenses 131984 Income Before Income Tax 25283 April 656608 335539 321069 161721 159348 137493 21855

March April 375,236 186,253 4,213 46,879 612,581 425,105 176,523 5,326 49,654 656,608 Revenues: Rooms Food and Beverage Telecommunications Other Income Total Revenues Cost of Sales: Rooms Food and Beverages Telecommunications Other Income Total Cost of Sales Gross Profit Rooms Food and Beverages Telecommunications Other Income Total Gross Profit Operating (Controllable) Expenses: Administration & General Marketing Franchise Fees 130,256 142,516 3,453 35,648 311,873 154,987 135,216 4,123 41,213 335,539 244,980 43,737 760 11,231 300,708 270,118 41,307 1,203 8,441 321,069 11,605 41,219 21,005 18,256 44,362 24,032 Property Operations and Maintenance 37,456 38,612 32,156 143,441 157,267 36,459 161,721 159,348 Utilities Total Operating Expenses Operating Income Other (Non-controllable) Expenses: Management Fee Property Taxes Reserve for Capital Improvements Insurance Interest Expense Total Non-controllable Expenses: Income Before Income Tax 6,145 25,613 18,321 6,901 75,004 131,984 25,283 6,425 25,613 20,153 6,852 78,450 137,493 21,855

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