Analysis of financial ratios commonly used by US lodging financial executives

Abstract

Financial ratios have always been a valuable tool for lodging industry managers. Ratios allow the user to summarise and analyse related data to provide meaningful information for making decisions. The purpose of the present study was to identify commonly used ratios in the lodging industry and discover their importance level for lodiging financial executives. Operating and profitability ratios clearly stand out as the most important ratios for lodging managers. The study makes a contribution bby educating managers about the range of ratios, their relative importance, and opportunities for using ratios not currently considered useful.