FINANCIAL ANALYSYSIS The analysis of the financial situation is based on the Sovereign Lodge Case Study. This is the description of the case study. The following information is available. Sovereign Lodge has been known to be, however the maintenance is up to date with the property which has been under different ownership for several occasions in the past years. It has no restaurant or bar. It is positioned as a mid-price, good quality "destination" resort lodge. The Lodge has been operational at the time that the skiing season has been active. The operations run from all through to the month of March.
It serves the ski mountain which is operational based on permits that facilitates the operations for a number of 120 days in the course of the year. All the existing 50 rooms that are positioned at east wing have an accumulated rent that amount to $15 in consideration of single occupancy accompanied by $20 for double occupancy. The wing on the west of this lodge is composed of30 rooms, all being made up of have impressive sites of the slopes that are skiing, in addition to the mountains, as well as the village.
Rooms that are evident in the wing fetch a rent of$20 to $25 in consideration of single as well as double room occupancy, in a respective manner. The average rate of the room occupancy over the season is close to 80% The relative amount of the single in comparison to double room occupancy ranges at 2:8. The results of operation in consideration of the fiscal year that elapsed are indicated in the Exhibit 1. Mr.
Kacheck who is acting as the manager in as far as the lodge is has expressed concern of the months in the off-season, which demonstrate losses for every month as well as the reduction of the high levels of profits that has been documented in the entire the season. He is for the opinion that the owners, who got the possession of the lodge during the later part of 2006 season, that they should take the steps of checking the losses during the off-season they have to come to a compromise of keeping the wing on the west the lodge in operation for the entire year.
His estimates of thethe average rate ofoccupancy in the course of the off-season range at 20% to 40% for the coming few number of years. According to the estimates of Kacheck in consideration of careful consideration of the clientele off-season a 40% rate of occupancy considering 30 rooms in the course of the off-season is a possibility in case owners may opt to commit $4,000 to facilitate for advertising every year ($500 for the 8 months).
There is no evidence to indicate that the 2:8 ratio of single vs. doubles would be different during the remainder of the year or in the future. The salary of the manager is compensated for the 12 months. His duties include the caretaker toi facilities at the time of the off season plus also contracting the majority of repair as well as the work of maintenance at that particular time. With the use of the wing to the west there is no work interference that would result to estimated extra $2,000every year to serve the purpose of repairing as well as maintaining the lodge