Question

Write a financial analysis about Hayaat Hotel by explain these points:
1. Legal requirements of an annual report and how the company you have chosen fulfills these requirements.

2. Target groups the hotel wants to communicate to.

3. Information supplied in the annual report.

4. Relation between information in the annual report and the target groups.

5. Conclusion on the communicative value of the annual report.

Answer 1

(1)

The legal requirement of an annual report is that any company that holds annual meeting for stockholders has to issue an annual report. SEC (Securities and Exchange Commission) elaborately specifies the requirements for annual reports and generally all listed companies have to provide their shareholders with annual reports each year. Hyatt Hotel fulfils these requirements by publishing its annual reports each year for the year ending December 31.

 

(2)

The target group that the hotel wants to communicate to is its shareholders, the public in general, stakeholders like vendors and suppliers and employees (who would like to know the financial position and situation of the company), and the government. Lenders and financial institutions that lend money to the company are also part of the target group.

 

(3)

The information supplied in the annual report forward looking statements, risks factors that the business is exposed to, legal proceedings against the company, financial statements and supplementary data, management discussion and analysis of the financial conditions and state of business of the company.

 

(4)

There is a direct and systematic relationship between information in the annual report and the target groups. The above mentioned information in the annual report helps the target groups to make informed decisions in its relation to dealing with the company. For instance the shareholders and lenders and investors use annual report to determine the financial health of the company and to determine if there is growth opportunity with regards to the equity value of the company and if it is safe to lend money to the company.

 

(5)

The annual report of Hyatt Hotel has a very high communicative value. Through its annual report Hyatt Hotel communicates the business and operational direction of the company, where the company currently is in terms of its financial position and where does it want to head to in future.