Ratio analysis

Ratio analysis are quantitative information tool presented in percentages, calculated and compared from last year and the year before P&L account and balance sheet. These analysis important recap the business success and for preparation to following year (Investopedia, 2012).

Peel Hotel Ratios:

	2010	2011
Gross Profit	20.50%	20%
ROCE	0.13%	2,3%
ROCI	0.25%	4,5%
Acid Test	25%	23%
Gearing	60,6%	55,7%
Earnings per share	0.2p	3.6p

In compare the two years of trade and their ratios in above tab, we can see, that the Comany is doing better in 2011 by simply looking at Earnings per share, which are higher by 3.4p from the previous year - 2010. Earnings with a combination of Return of capital employed and invested are the sign that Peel Hotels despite the same Gross Profit margin in 2011 as in previous year, still managed their finances well and is ready for the next year of trading.