Business, Management and Accounting
5 years ago

High cost of capital hinders Hotel Alila's value creation potential.

2 views
The effectiveness & relationship of economic valueadded (EVA) with working capital & reported earning inhotel Alila
Bayu Pratama Tamin

Paper Summary

The study looked at how Economic Value Added (EVA) and working capital affect the financial performance of Hotel Alila. By analyzing the company's EVA and working capital, it was found that in 2010, the increase in EVA was not significant due to high capital costs not being matched by profit generation. The Weighted Average Cost of Capital (WACC) for the company increased to 8.14%, the highest in the period 2008-2010. Additionally, the invested capital saw a significant increase from Rp. 7,621,789,910.26 in 2008 to Rp. 13,241,882,033.00 in 2010.

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