MARKET TRIVIA/ TRAVEL
Understanding cash ratios
The cash ratio is the most conservative liquidity ratio. It goes a
step further and examines the ability of the firm to settle short term
liabilities. It excludes all current assets except the most liquid: cash
and cash equivalents. This ratio indicates the extent to which current
liabilities can be paid through very liquid assets. The cash ratio is
defined as follows:
The cash ratio is an indication of the firm’s ability to pay off its
current liabilities if for some reason immediate payment were demanded.
Example: If ABC Company has cash amounting to Rs. 100 Mn and
Marketable Securities Rs. 30 Mn. The Cash ratio is 0.4 indicating that
liquid current assets are 0.4 times the current liabilities.
Asset Management Ratios
Asset management ratios indicate of how efficiently the firm utilizes
its assets. That is they indicate the efficiency of the use of assets in
generating sales. They are also referred to as efficiency ratios, asset
utilisation ratios, or asset turnover ratios. There are five key
efficiency ratios.
Average Collection Period (ACP)
The average collection period, also known as days sales outstanding,
indicates the average length of time the firm must wait after making a
credit sale before it collects cash. In other words, it shows the
average number of days accounts receivables remain outstanding. The ACP
is calculated as the receivables divided by credit sales per day.
This is an important ratio used to evaluate the credit policy of the
firm in relation to the industry norms. A higher ACP indicates a liberal
policy in that the firm gives more times to debtors for making payments.
A lower ACP indicates a stringent policy in that the firm gives less
time for debtors.
Example: Assume that ABC Company’s sales are Rs. 4,800 Mn and 75 per
cent of these sales is from credit sales and Accounts Receivables is Rs.
300 Mn. The Average Collection Period is 30 days.
If the ACP of the Industry is 20 days then this indicates that ABC
Company is less efficient in collections and seems to have a more
liberal credit policy.
Inventory Turnover
Another major asset turnover ratio is inventory turnover.
It is the cost of goods sold in a time period divided by the average
inventory level during that period, where the average inventory is the
sum of the beginning and ending balance sheet inventory divided by two.
This ratio indicates whether inventory levels are reasonable in
relation to cost of good sold.
Lower Inventory turnover ratio relative to the industry standard may
indicate excessive, obsolete, or slow-moving inventory, while higher
turnover may indicate inadequate inventory and perhaps possibility of
inventory shortages.
Example: If ABC Companies cost of sale is Rs. 2,950 Mn and the
inventory at the beginning is Rs. 500 Mn and at the end inventory is Rs.
580 Mn, the inventory turnover for ABC Company will be as follows,
Assume that the industry norm is eight times then this indicates that
ABC is less efficient in inventory management. It needs to examine the
investment in inventory to see why it is carrying too much inventory.
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Eureka Interactive Media refurbishes Holiday Villas
Chairman of United Holidays, Asger Mohideen and CEO of Eureka
Technology Partners Dilendra Wimalasekere at the presentation. |
Eureka Interactive Media has given the Holiday Villas website a face
lift with its bespoke solutions, making the site more attractive and
user friendly (www.holidayvillas.lk).
The latest project marks another successful revamp of a travel site
within the United Holidays group. In a competitive environment where
customers have an extensive variety of travel destinations to choose
from, a website that captures their attention has become a key marketing
tool for leisure companies. Through constant change and innovation
powered by Eureka’s expertise in the field United Holidays’ websites
offer the exact needs of customers.
With a revamped visual experience to keep up with today’s consumer
needs, and added new features such as need-specific signature tours,
United Holidays and Eureka have ensured that Holiday Villas remains
ahead of competition. “Despite the tough times faced by the tourism
industry in Sri Lanka, the luxury travel segment has been growing
steadily.
This has been fueled mainly by the many new villas and boutique
hotels that have emerged over the past few years.
Holiday Villas was created to cater to this segment which has very
specific needs.
Eureka has delivered a high quality, visual and dynamic site that
meets the needs of premium travelers,” Executive Director of Holiday
Villas Chaminda Dias said.
Hilton Colombo’s ‘Big 21’ revealed
Hilton Colombo announced their biggest, most anticipated celebration
yet - their 21st Birthday bash. This is to be held on Sunday the
September 21, from 6 p.m. onwards.
Marketing Communications Manager of the hotel Gigi De Silva, revealed
that in the lead up to this massive celebration, the hotel will go to
great lengths to transform their sports centre complex into a
spectacular setting where guests can indulge in an evening of food,
entertainment and enjoy a carnival atmosphere. She added, “There has
never been a party like this in the country before.”
At the spectacular celebrations, guests will be able to feast on a 21
varieties of cuisines from across the world. The multi award winning
chefs from the Hilton Colombo will put together this authentic dishes
from countries including Japan, China, Germany, France, America and
Italy, amongst others.
Guests attending the ‘Big 21’ will also be treated to the very best
entertainment acts in Sri Lanka, with favourites Marians, Iraj,
Centigradz, Chinthy, Ashanti, Natasha, Phase three, dancing stars
Dushyanth Weeraman and Hashini, and the World Choir Champions
Revelations signing up for the event.
While crowds will also be treated to a display of coordination as the
award winning Hilton bartenders display their flaring skills on the
country’s longest bar. General Manager of the Hilton Colombo William
Costley said, “We’ve had a great 21 years here in Colombo and we have
always wanted to provide our guests with the very best in hospitality.
As such we intend to make the Big 21 a truly spectacular and memorable
event; the biggest of the year”.
“We were voted the Best Hotel in Sri Lanka 2007 at the “Oscars” of
the Travel and Tourism Industry, the World Travel Awards in Bangalore in
December as well as the best Hilton International Brand Service
Worldwide Hotel of the Year 2007, Asia Pacific Brand Award Winners, Asia
Balanced Scorecard Winners, Asia and Asia Pacific Hilton.
The management of the hotel also revealed plans to create the longest
sandwich, flaring bar and ice-sculpture birthday candles that the
country has ever seen.
TAASL, IATA-AASL AGMs in Pattaya
The 33rd Annual General Meeting of the Travel Agents Association of
Sri Lanka (TAASL) and the 20th Annual General Meeting of the IATA Agents
Association of Sri Lanka (IATA-AASL) were jointly held in Pattaya,
Thailand from August 01-05, 2008. Over 100 participants attended this
event, which included a two-night stay in Pattaya and a two-night stay
in Bangkok.
S Premakumara of Travel World (PVt.) Ltd. was elected as the
President of the Travel Agents Association for the year 2008 / 2009
while Gerard Victoria of BOC Travels (Pvt.) Ltd. was elected as the Snr.
Vice President and V Mahathevan of Pyramid Air Services Ltd. was elected
as the Jnr. Vice President. S Paramanathan of Atlas Lanka (Pvt.) Ltd.
will join the Council in his capacity as the Immediate Past President.
The following members were elected as Council Members of the Travel
Agents Association for the year 2008 / 2009:
Anne Sivalingam of Anne Travels and Tours (Pvt.) Ltd., Suresh Mendis
of Classic Travel (Pvt.) Ltd., Dino De Fonseka of Delair Travels (Pvt.)
Ltd., Channe Wijemanna of George Steuarts Travel Intl. Ltd., Rohan
Abeywickrema of Hawk Travels Ltd., Riza Ahamat of Hemas Travels (Pvt.)
Ltd., A A M Wazeer of JNW Lanka Tours, Trevor Rajaratnam of Mackinnons
American Express Travel (Pvt.) Ltd., Rodney J Koelmeyer of Superlink
Travels (Pvt.) Ltd., Rizmi Riyal of The Traveller Global (Pvt.) Ltd., A
Vigneswaran of VMS Travels and Tours (Pvt.) Ltd. and Ahintha Amerasinghe
of Worldlink Travels (Pvt.) Ltd.
The Deputy Mayor of Pattaya graced the dinner that followed the
Annual General Meetings. Other invitees included members of the Tourism
Authority of Thailand, representatives of tourism associations in
Pattaya.
A Cultural Show sponsored by the Tourism Authority of Thailand and a
business card draw where several airline tickets were given away, ended
the day’s events.
The Principal Sponsor of the event was SriLankan Airlines who
provided both Associations with a very special airfare for the
participants.
Hayleys AIG Insurance came forward to sponsor participants to a
Dinner Cruise on the Chaophraya River in Bangkok. Air Arabia, Emirates,
Singapore Airlines and Qatar Airways very kindly provided air tickets,
which were given away at the business card draw and Thai Airways hosted
the Gala Dinner following the Annual General Meeting.
The three GDS companies Abacus, Amadeus and Galileo also provided
sponsorship for the event.
R.P.C. Global Travels promote local lourism
At a time when inbound tourism has dropped compared to previous
years, the domestic market has blossomed out for R.P.C. Global Travels,
the strategic business unit of the Richard Pieris Group.
The Company recently handled a group of 160 from Dialog who, together
with their families, were treated to an overnight stay and a memorable
award ceremony.
Managing Director Franklyn Mendis, commenting on MICE (Meetings,
Incentive groups, Conferences and Exhibitions) segment said: “Sri Lanka
has so much of resorts, boutique hotels, villas, apartments, bungalows
or facilities for adventure that are not known to many and not promoted
well. We are promoting them among locals, both individuals and groups,
depending on their requirements and budgets.” |