AL Batinah Hotels

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 Table of Contents

AL Batinah Hotels...........................................................................................................................1

Introduction.....................................................................................................................................2

Social Aspects Of Business Environment For AL Batinah Hotels..................................................2

Technological Social Aspects Of Business Environment For AL Batinah Hotels..........................2

Oman’s Progression With GCC Agreement....................................................................................2

Proposed Organisational Structure In KSA.................................................................................3

Global Competitors & Startup Cost.............................................................................................4

Annual Expected Sales................................................................................................................5

Current Scenario..........................................................................................................................6

Income Statement and Profitability.............................................................................................6

Balance Sheet Outcome...............................................................................................................7

Net Profitability...........................................................................................................................8

Cash Flow Statement Projected...................................................................................................8

Cash Flow from Financial Activities...........................................................................................9

Ratio Analysis............................................................................................................................10

Overall Efficiency Ratio............................................................................................................12

Solvency Ratio...........................................................................................................................13

Turnover Ratio...........................................................................................................................14

Conclusion.....................................................................................................................................14

Bibliography..................................................................................................................................15

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Introduction

Al Batinah hotels have many opportunities to grow and excel in business operations. Since there

is a wide range of products and services for the customers, KSA is an open-ended community, so

this will be the best opportunity for AL Batinah hotels expansion. The expansion will offer

various options for jobs, evolution, development, growth, and long term growth.

global trading activities

Social Aspects Of Business Environment For AL Batinah Hotels

AL Batinah hotels is a well-developed hotels chain in Oman. They have more than 40 franchises

all over Oman, Muscat. all of these franchises work under the control of the head office. AL

Batinah hotels are working since 1972. the idea behind this hotels china was to introduce a chain

of hotels was to serve the customers, community, society and gathering. Now we are looking for

expansion. For better growth and development, the plan is to launch in KSA.

Technological Social Aspects Of Business Environment For AL Batinah Hotels

AL Batinah hotels is a well-developed hotels chain in Oman. They have more than 40 franchises

all over omen, Muscat. All of these franchises work under the control of the head office. AL

Batinah hotels are working since 1972. the idea behind this hotels chain was to introduce a chain

of hotels was to serve the customers, community, society and gathering. Now we are looking for

expansion. For better growth and development, the plan is to launch in KSA.

KSA is a developed nation. There are already many hotel chains all over KSA. These hotels are

generating huge revenues, as well. These hotels have standardised their services, so they deliver

the best products, on accurate time, in the best quality and best taste and on precise capacity. So,

the standards of the hotels must be met.

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Oman’s Progression With GCC Agreement

You are appointed as CEO of a company in the hotel industry in Oman with a plan to expand in

another GCC country. Among the GCC countries, which GCC country will you consider the best

for expansion. Provide an introduction to the selected state, the reason to choose this particular

country, provide critical discussions on the economic situation of the country.

Hotels, a restaurant in Auer countries, are developed. The food chain business is effective and

efficient. There are many hotels, resorts, and restaurant in the UAE. GCCC hotels are known all

over the world. These are famous for their hospitality, excellent food flavour and serving

methods. So, the hotels all over GCC are operating in their full capacity. Being CEO of AL

Batinah hotels, I would like to introduce this hotel chain in KSA.

following are the prospective growth charts and projected work opportunities for AL Batinah

hotels:

Proposed Organisational Structure In KSA

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In KSA, there is a trend of CEO and management proper structure. So, to meet the need of the

local community, there will be an appropriate structure of the organisation. This structure of the

business is maintained as per business requirement in KSA. as shown above, and there is a direct

communication route between higher management and lower management. So, AL Batinah

hotels will develop the organisational structure as per requirement. The design of the

organisation is proposed as above.

Global Competitors & Startup Cost

Startup Cost For The Launching New Franchise In KSA

equity investment SAR 75,000.00

debt investment and mortgager’s share SAR 100,000.00
savings and reserves SAR 45,000.00
interest estimated SAR 10,500.00
SAR 34,500.00
investments and funds SAR 1,500.00
bank loans SAR 12,300.00
total equity invested in business SAR 223,300.00

The start-up cost includes equity funds as well as debt financing. It is reported that both of these

finances will sum-up into a smooth business. hence the company will grow in future

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 total equity invested in bsuiness
1% 4%

12% equity investment

27% debt investment and
morgager's share
4% savings and reserves
interest estimated

investments and funds

16% bank loans

36%

Annual Expected Sales

The annual expected sales are calculated on the base year sales. This is estimated on the base of

the index of sales. The sales index is generated through previous years sales in GCC countries.

sales
2021 65,492
2022 72,041
2023 79,245
2024 87,170
2025 95,887

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 Sales Growth
120000
100000
80000

Sales
60000
40000
20000
0
2021 2022 2023 2024 2025
Years

Current Scenario
Income Statement and Profitability

The net income is expected to grow. It is estimated that the net income in September 2020 was

reported to fall. This was addresses to COVID 19. however, sales are coming to beckon their

previous position by 2021. it is estimated that the sales will regenerate their original position

when there is higher revenue for the company.

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Balance Sheet Outcome

As shown following, the net balance sheet for the company grew tremendously in 2018. the

outcomes were excellent. Expansion plan in KSA is proposed in 2018, but all the delays were

made due to COVID outbreak. The COVID outbreak has shaken the operational capabilities as

well as the performance of the company. the net profitability is shown as following:

the net income statement in detail is shown as follows. Net income is calculated on business

operations. The net profitability of the business is estimated to grow back to its original position

by 2021 third quarter despite COVID outbreak.

2019

Net Income Growth -29.52%

Sales or Revenue 920,419

Sales or Revenue Growth -12.01%

EBITDA -46,320

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Net Profitability

It is shown in the graph that there were no debs in 2018. so, the company planned an expansion.

But the COVID outbreak has raised the debts ratio again. There are more debts and more

company expenses that are related to the company's performance. However, sales improved in

2019. similarly, EBIT and leverage are better in 2019 as compared to 2018.

Cash Flow Statement Projected

The cash flows showed that company has a fluctuating cash position. Cash flow from operating,

financing, and investing activities are calculated on the base of cash funds generated. However,

the analysis showed that the best cash investment funds calculated in previous years are in 2018.

Net cash provided by operating activities

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 Net cash provided by operating activities
SAR 1,600.00

SAR 1,400.00

SAR 1,200.00

SAR 1,000.00

SAR 800.00

SAR 600.00

SAR 400.00

SAR 200.00

SAR -
SAR 43,098.00 SAR 43,463.00 SAR 43,828.00 SAR 44,194.00 SAR 44,559.00

Cash Flow from Financial Activities

Net cash provided by (used in) financing activities

SAR -
SAR (100.00)
00

00

00

00

00
8.

3.

8.

4.

9.
9

5
,0

,4

,8

,1

,5

SAR (200.00)
43

43

43

44

44
R

Net cash provided by (used

SA

SA

SA

SA

SA

SAR (300.00) in) financing activities

SAR (400.00)
SAR (500.00)
SAR (600.00)
SAR (700.00)
SAR (800.00)

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Net Cashflow From Investing Activities

Net cash used in investing activities

SAR -
SAR 43,098.00 SAR 43,463.00 SAR 43,828.00 SAR 44,194.00 SAR 44,559.00
SAR (50.00)

SAR (100.00)

SAR (150.00)
SAR (200.00)

SAR (250.00)

SAR (300.00)

SAR (350.00)

SAR (400.00)
SAR (450.00)

Ratio Analysis
Ratios analysis for the hotel is calculated from the annual report of Al Batinah hotel. It is

discussed as follows:

2018 2019
Fiscal Period: December

Capitalization1 32,6 19,5

Enterprise Value (EV)1 33,7 20,1

P/E ratio 45,8x 12,6x

Yield 4,21% 7,02%

Capitalization / Revenue 5,13x 2,32x

EV / Revenue 5,32x 2,38x

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 EV / EBITDA 22,9x 7,41x

Price to Book 1,15x 0,69x

Nar of stocks (in thousands) 3 428 3 428

Reference Price (OMR) 9,50 5,70

Current Ratio

Current Ratio
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2018 2019

As shown in the graph, the current ratio is 2018 was 67%, and in 2019 it is estimated at 89%.

Similarly, the liquid ratio for the company in 2018 was 20% it was estimated at 44% in 2019.

hence there is a massive rise in liquidity and cash maintenance.

Profitability Ratio

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 Profitablity Ratios
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2018 2019

gross profit ratio net profit ratio EBIT ratio SGA margin

Profitability rates include gross profit ratio, net profit ratio, EBIT and SGA. as shown in the

graph, the gross profit ratio is 2018 was 67%, and in 2019 it is estimated as 91%. Similarly, the

net profit ratio for the company in 2018 was 68% it was estimated at 29% in 2019. EBIT is

reported to be raised since it was 35% in 018 and 79% in 2019. so overall company performance

is excellent.

Overall Efficiency Ratio

Over all Effi ciency

Return on Investment EPS net intrest expense

2019

2018

0% 500% 1000% 1500% 2000% 2500% 3000% 3500% 4000% 4500%

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Efficiency ratios include debt ratio, EPS, capital ratio. As shown in the graph, EPS had

demonstrated tremendous growth in 2019. debt ratio in 2018 was 67%, and in 2019 it is

estimated as 89%. Similarly, the capital fund ratio for the company in 2018 was 20% it was

estimated at 44% in 2019. hence there is a massive rise in liquidity and cash maintenance.

Solvency Ratio

Solvency Ratios
120%

100%

80%

60%

40%

20%

0%
2018 2019

liabilties to assets current liabilities/ curernt assets

These ratios include laities and assets comparison. As shown in the graph, the current assets to

current liabilities ratio in 2018 were 77%, and in 2019 it is estimated at 99%. Similarly, the

liabilities to assets ratio for the company in 2018 was 20% it was estimated at 44% in 2019.

hence the company’s annual profitability has dramatically improved

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Turnover Ratio

Tirnover Rayio
60%

50%

40%

30%

20%

10%

0%
2018 2019

inventory turnover= inventorty/ net sales assets turnover= net assets/ net sales
debtotors turnover= debtors/ net sales creditors turnover= creditiors/ net sales

As shown in the graph, the turnover ratios are better in 2019 as compared to 2018.

Conclusion

KSA is a well-developed community. It offers opportunities for expansion and growth for the

new bee. So, new projects like Al Batinah hotels have open opportunities. Since there is a wide

range of products and services for the customers, KSA is an open-ended community, so this will

be the best opportunity for AL Batinah hotels expansion. The expansion will offer various

opportunities for jobs, evolution, development, growth, and long term growth.

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dhabis-taqa-reveals-838bn-revenue-in-first-nine-months-of-2020

taqa.com. (, 2000). https://www.taqa.com/. Retrieved from https://www.taqa.com/

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Retrieved from https://www.worldoil.com/news/2020/11/10/uae-s-taqa-to-allow-

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