The paper "The Performance of Shana’ s Four Apartments" is a greater example of a case study on business. Keeping proper records is of paramount importance in the determination of a business’ s profitability. It is also important in unearthing areas where the business is making losses. This was the reason behind Shana’ s creation of an excel system for analyzing the performance of her business’ performance. However, proper record keeping alone is not enough to assure one of the desired levels of profitability. There need to be proper advertising and pricing measures put in place while the business must offer the desired quality of service if it is to be profitable.
This paper analyzes the performance of Shana’ s four apartments with the aim of establishing whether they are performing well and recommending the measures that she should undertake to ensure her business attains the desired level of profitability. Data analysis From the data provided by Shana, a one-bedroom deluxe is the most profitable of her four apartments contributing 41.39% of the total profit she realized. The one-bedroom deluxe had a total profit of $10,452 which was the highest and also had the highest average revenue of $46.44 per night.
On the other hand, the apartment that has the lowest profitability is the one-bedroom apartment as it only contributed 6.84% to the total profits she realized. The one-bedroom apartment only realized $1,727 profit while only contributing $22.54 revenue per night. The profitability for the one-bedroom deluxe is neither high nor too low as it is within the industry average of 40-50%. However, the one-bedroom apartment’ s profitability is too low and something needs to be done to improve it.
The rate charged by Shana seems to favor the higher end of the market as only a few hotels are charging higher rates. Furthermore, the most popular of her apartments are the ones that she charges lower fees implying that her apartments might be overpriced (William, 2005). Charging too high rates might adversely affect the apartment’ s profitability especially if the apartments are not of superior quality since customers want to get value for their money. This would make them opt for places charging lower rates so that they can maximize their experience.
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William, S2005, Contemporary accounting technique, Oxford, Oxford university press.