Investment in ADNH Requirement 4 (2).docx - MEMORANDUM To Investors From Date RE Abu Dhabi National Hotels Abu Dhabi National Hotels is in the

Investment in ADNH Requirement 4 (2).docx - MEMORANDUM To...

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MEMORANDUM To: Investors From: Date: August 22, 2018 RE: Abu Dhabi National Hotels Abu Dhabi National Hotels is in the hospitality industry in the United Arab Emirates. Most business occurs in Abu Dhabi but business has spread throughout the UAE. ADNH is partnered with Hilton, Sofitel, Sheraton and Le Meridian. The business is divided into five segments including, hotel business, retail business, catering business, transportation and holding. Financial Analysis: Overall the trend analysis for ADNH looks to be in a downward turn since 2007. In 2007 the return on equity was 16.4% and in 2016 it was 6.57%. The decrease in return on equity shows that ADNH is not using investor’s funds in 2016 as well as it was in 2007. The fixed assets to equity ratio in 2016 was 104.23% which means ADNH has less equity than fixed assets and is using debt to finance some of the fixed assets. The debt to equity ratio has increased from 18% in 2007 to 43.74% in 2016. The debt to equity ratio measures financial leverage and the large increase in this ratio means ADNH is aggressively financing.
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