FINANCIAL ANALYSIS OF LISTED HOTEL AND TOURISM COMPANIES IN NEPAL

Abstract

This study aims to analyze the financial status of listed star hotel companies in Nepal, specifically focusing on the impact of liquidity on profitability. Utilizing a causal research design, the study examines three key financial ratios: return on assets (ROA), return on equity (ROE), and earnings per share (EPS). Three listed star hotels were selected through judgmental sampling, and data from the past five years were analyzed. Averages of these financial ratios were compared, and regression analysis was applied using SPSS to determine the impact of liquidity. The findings indicate that at a 5% level of significance, liquidity does not significantly affect the financial ratios. Contrary to many studies that suggest liquidity improves financial performance, this research found that debt, asset utilization, and liquidity positively influence the financial performance and shareholders' value of Nepalese hotel companies. It is recommended that future research should explore the effects of investment in other economic sectors to draw parallels with the hotel and tourism sector. This could provide a broader understanding of how different investment strategies impact financial performance across various industries. Key Words: Liquidity position, Assets utilization, Inventory turnover, Debt management, Return on assets(ROA) and Earnings per Share(EPS)