Analyzing financial risk at dana sailing hotel in danang thesis defense

THE UNIVESITY OF DANANG - UNIVERSITY OF ECONOMICS     
FALCUTY OF FINANCE 

THESIS
THESIS DEFENCE 
DEFENCE 
Title: Analyzing financial risk at Dana Sailing Hotel in Danang 

Academic advisor: MSc. Bui Phan Nha Khanh                                                 
Student:  Le Chi Thien
Class:  42K15.3

Danang, 2020


INTRODUCTION


Significance of the Topic 
The tourism industry plays an essential role in promoting economic growth
especially for developing countries like Vietnam.

Still so fragile, likely susceptible to went down even with the slightest fluctuation.
( Not to mentioned small businesses like Dana Sailing, corona)

Create prevention and protection policy for the hotel to against financial risks
so that we can consolidate the hotel business operations.


Aim of the topic 
•

•

Types and causes of risks that we often faced in hotel business. 
Evaluate the status of analysing financial risk in business operations of
Dana Sailing Hotel. 

•

Study the model of analysing financial risk in business operations of Dana
Sailing Hotel, thereby drawing advantages and disadvantages in the
work to complete the model. 

•

Proposing solutions to prevent, avoid, eliminate or minimize financial losses
that financial risks may cause. 


Research objects
The study of theoretical and practical issues of financial risk analysis in business
operation and the financial risks that are likely to affect the Dana Sailing Hotel. 

Research area



Research period: surveying the analysing financial risk activities in business
activities at Dana Sailing hotel within 3 years: 2017-2019



Research space: topic research on general data of Dana Sailing hotel and
current situation of analysing financial risk processes in business activities at
Dana Sailing hotel.  


Data and research methods




Analyzing and synthesizing theory: 
Statistical method: 
Survey the current situation method include: 

✰
✰

Survey internal factors of the Dana Sailing Hotel: 
Surveying external factors the of the Dana Sailing Hotel:


THESIS STRUTURE

CHAPTER 1

CHAPTER 2

CHAPTER 3

Review of literature about

Apprase the current state on financial

financial risk analysis in

risk analysis in business operations of

financial risk analysis in busness

DANA SAILING hotel.

operations of DANA SAILING hotel.

business operations.

Sugestions and solutuions to improve


THESIS STRUTURE

CHAPTER 1

CHAPTER 2

CHAPTER 3

Review of literature about

Apprase the current state on financial

financial risk analysis in

risk analysis in business operations of

financial risk analysis in busness

DANA SAILING hotel.

operations of DANA SAILING hotel.

business operations.

Sugestions and solutuions to improve


CHAPTER 1
Graduation of Corporate Finance students


CHAPTER 1
1.1. Overview of financial risk analysis in business operations

1.2. Hotel business operations 

1.3. Conclusion

Graduation of Corporate Finance students

CHAPTER 2
Graduation of Corporate Finance students


CHAPTER 2
2.1. Overview about company

2.2. Business context of Dana Sailing hotel

2.3. Financial risk analysís at Dana Sailing 

2.4. General Assessment

Graduation of Corporate Finance students


2.1. Overview about company
OUR COMPANY

Company name: TRAN GIA KHANH ONE MEMBER CO., LTD  

Location: at 65 Ha Bong, Phuoc My Ward, Son Tra District, Danang.

Business operation registration certificate: 0401682952, date:
17/06/2015 

Phone: 0236 3 662222

Website:  />

Organization structure of the Dana Sailing Hotel


Organization structure of the Dana Sailing Hotel

6 Department:  
THE RECEPTION, ROOM, RESTAURANT, ACCOUNTING
- FINANCE, MANAGER, TECHNICAL, SECURITY, SALE.


Business context of Dana Sailing Hotel
Targets

2017

2018

2019

329,050,806

789,786,000

1,205,419,304

2. Profit before tax

(418,093,637)

(419,541,177)

(53,311,578)

3. Profit after tax

(418,093,637)

(419,541,177)

(53,311,578)

0

0

0

5. Total assets

4,854,540,177

1,932,341,500

1,381,451,942

6. Total equity

581,320,177

161,779,000

108,467,422

7. ROA

-0.08612

-0.21712

-0.03859

8.ROE

-0.80663

-2.59329

-0.49149

1. Turnover

4. Taxes payable to the State Budget

Table 2.1 Business situation of Dana Sailing Hotel over the years


Financial risk analysis at Dana Sailing 

 Analyze financial risks through financial leverage
Targets

2017

2018

Liabilities must pay

4,273,220,000

1,770,562,500

1,272,984,520

Asset

4,854,540,177

1,932,341,500

1,381,451,942

Debt ratio

88.03%

91.63%

92.15%

Profit before tax

(418,093,637)

(419,541,177)

(53,311,578)

CIT

0

0

0

ROE

-0.80663

-2.59329

-0.49149

Table 2.2 Effect of debt ratio on ROE

2019


Financial risk analysis at Dana Sailing 

 Analyze financial risks through financial leverage

Targets

2017

2018

2019

EBT

(418,093,637)

(419,541,177)

(53,311,578)

103,558,356

18,794,904

0

1.25

1.04

0

Expenses 
Interest

Financial leverage

Table 2.3 Financial leverage of Dana Sailing for the period of 2017-2019


Financial risk analysis at Dana Sailing 

 Analyze financial risks through ROE variability
Targets

2018/2017

2019/2018

Growth rate of NPAT

-0.345%

686.96%

The growth rate of equity

-259.33%

-49.15%

ROE increase speed

-68.73%

428.57%

Table 2.4 The growth rate of indicators reflects ROE over the years


Financial risk analysis at Dana Sailing 

 Analyze financial risks through solvency

 Year

2017

2018

2019

Solvency

1.14

1,093

1,085

Table 2.5 The current solvency of Dana Sailing

Financial risk analysis at Dana Sailing 

 Analyze financial risks through sensitivity to exchange rates, interest rates and
commodity prices

2018/2017

2019/2018

Targets

Changes in interest
expenses

Level

%

Level

- 84,763,452

-450.09%

-18.794.904

Table 2.6 Movements of interest expenses and proportion of short-term debt to total assets of Dana Sailing for the period of 2017 2019

Financial risk analysis at Dana Sailing 

 Exchange rate sensitivity of Dana Sailing during 2017 - 2019
With the trend rate rose slightly and remain stable during the period
2017 – 2019 and lack of abroad investments in Dana Sailing, so the
change in the exchange rate do not affect directly in its earnings power.
Decline in the rates in the year 2018 and 2019 increased the
competitiveness of Dana Sailing on the market, made a positive impact
on business capability and increasing ROE. Thus, it can be said that
Dana Sailing's financial situation is sensitive to exchange rates.


Financial risk analysis at Dana Sailing 

 Sensitivity to commodity price of Dana Sailing during 2017 - 2019
Inflation has risen, but not so much in the period from 2017 to 2019,
this makes the commodity price input of Dana Sailing increased
slightly, but thanks to the rise of inflation helps market more active.
The hotel, Dana Sailing is harder to enter amount of goods to
providing services. Thus, Dana Sailing's price sensitivity is quite
large, affecting profit margin.


           
A general assessment of the financial risks analysis processes in business operations
outcomes at Dana Sailing Hotel  

The successes achieved 



Having a reputable gold member on the booking page due to
prestigious get from customers.



A fanpage of 2 thousand likes on social networks.



The number of rooms always ensures over 76% of the hotel’s
rooms. 


           
A general assessment of the financial risks analysis processes in business operations
outcomes at Dana Sailing Hotel  

Limitations:



 The hotel's internal financial risk analysis processes system is still
theoretical quality



 The figures of financial statements managed by the staff no longer
accurately reflect the financial situation of the hotel, making the risk
assessment no longer accurate. 



 The implementation of financial risk monitoring for the business operation
of the enterprise is almost neglected.