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Wynn Las Vegas Financial Analysis

Wynn Las Vegas Financial Analysis

Las Vegas Operation

Wynn Las Vegas is a luxury resort and casino situated in the Las Vegas region in Nevada. It lies in the North Eastern region of Las Vegas.  The project entails

an analysis of the company’s financial position and a comparison of the same with other major companies. The analysis of the company’s finances is done on the basis of

the major financial ratios. These financial ratios are divided into three major ratios; profitability ratios, leverage ratios and liquidity ratios (Palmer 2007). The

competitors considered in this document include Aria, Bellagio, Venetian, and Palazzo. The paper analyzes the financial ratios of Wynn Resorts Ltd in comparison to the

financial ratios of its competitors. The financial ratios considered in this paper include gross profit margin, net profit margin, return on assets, return of equity,

liquidity ratio, quick ratio, leverage ratio, and debt ratios. Data relevant to the calculation of these ratios was tabulated for the three companies under

consideration for the year 2013 financial results.
Wynn
Las Vegas    Aria    Bellagio    Venetian    Palazzo
Gross Profit Margin    38.96%    28.21%    29.92%    32.21%    35.41%
From the table, it can be established that Wynn Las Vegas has the highest Gross Profit Margin. This means that the resort has the highest efficiency of operation in

comparison to the other four resorts.
Wynn
Las Vegas    Aria    Bellagio    Venetian    Palazzo
Net Profit Margin    17.72%    22.65%    21.45%    16.96%    20.44%
From the table, it can be established that Bellagio has the highest Net Profit Margin, and Wynn Lass Vegas has the least. This means Wynn Lass Vegas had the least

efficiency, after all, the expenses were considered.

Wynn
Las Vegas    Aria    Bellagio    Venetian    Palazzo
Return on Asset (ROA)    8.7%    0.11%    1.06%    0.02%    0.02%
From the table above, Wynn Las Vegas has the largest return on Assets, which implies that the company’s assets have the greatest productivity.

Wynn
Las Vegas    Aria    Bellagio    Venetian    Palazzo
Return on Equity (ROE)    -15.26%    -18.92%    -8.68%    0.51%    -7.85%
The table above shows that Wynn Las Vegas has the least Return on Equity. This implies that the hotel and resort’s equity has the least earnings power compared to its

competitors.

Wynn
Las Vegas    Aria    Bellagio    Venetian    Palazzo
Liquidity Ratio    2.03    1.43    2.12    1.95    1.1
The table above shows that Bellagio has the highest current ratios, closely followed by Wynn Lass Vegas. The high value of liquidity ratio indicates that the company

has greater ability of paying short-term debt than those companies with lower current ratios.

Wynn
Las Vegas    Aria    Bellagio    Venetian    Palazzo
Quick Ratio    2.06    1.82    3.01    2.32    1.94
The Bellagio has the highest short-term liquidity of the five hotels and resorts. The Wynn Las Vegas is third compared to its competitors. This implies that the

Bellagio is more capable of handling short-term debts than Wynn Las Vegas.

Wynn
Las Vegas    Aria    Bellagio    Venetian    Palazzo
Leverage Ratio    0.98    1.26    0.25    0.98    0.8
From the table above, it can be established that both Wynn Lass Vegas and Venetian have the same Total Debt to Total Assets Ratio. Aria has the highest Total Debt to

Total Assets Ratio. This means that Aria has the highest percentage of assets financed through borrowing.

Wynn
Las Vegas    Aria    Bellagio    Venetian    Palazzo
Debt Ratio    3.28    3.91    5.21    1.81    4.19
The table above shows that the Wynn Las Vegas can be ranked fourth in terms of debt ratio. The Bellagio has the highest leverage for stockholders; investment compared

to the other resorts.

Macau Operation

The major competitors of Wynn Las Vegas that are considered for this analysis are, Four Seasons hotel Macau, Mandarin Oriental Hotel Macau, and Crown Towers. The major

financial ratios included for the analysis are; the gross profit margin, net profit margin, the debt ratio, the debt to equity ratio and the returns on assets ratio

(ROA).

Wynn Las Vegas    Crown Towers    Four Seasons Hotel Macau    Mandarin Oriental Hotel Macau
Gross Profit Margin    38.96%    18.86%    46.89%    35.58%
Four Seasons Hotel Macau has the highest efficiency of operations with Crown Towers having the least.

Wynn Las Vegas    Crown Towers    Four Seasons Hotel Macau    Mandarin Oriental Hotel Macau
Net Profit Margin    17.72%    21.19%    24.60%    21.8%
Four Seasons hotel Macau has the highest efficiency after all expenses are considered with Wynn Las Vegas having the least.

Wynn Las Vegas    Crown Towers    Four Seasons Hotel Macau    Mandarin Oriental Hotel Macau
Return on Assets (ROA)    10.62%    9.98%    16.05%    13.4%
Four Seasons Hotel Macau has the highest productivity of assets followed by my company then crown towers cones last

Wynn Las Vegas    Crown Towers    Four Seasons Hotel Macau    Mandarin Oriental Hotel Macau
Return on Equity (ROE)    -15.26%    16.46%    49.74%    61.70%
Mandarin Oriental Hotel Macau has the highest earnings power of equity with Wynn Las Vegas having the least.

Wynn Las Vegas    Crown Towers    Four Seasons Hotel Macau    Mandarin Oriental Hotel Macau
Liquidity Ratio    2.03    0.8    1.91    2.2
Mandarin Oriental Hotel Macau has the highest ability to pay short-run debts.

Wynn Las Vegas    Crown Towers    Four Seasons Hotel Macau    Mandarin Oriental Hotel Macau
Quick Ratio    2.06    0.78    1.9    2.16
Mandarin Oriental Hotel Macau has the highest short-term liquidity

Wynn Las Vegas    Crown Towers    Four Seasons Hotel Macau    Mandarin Oriental Hotel Macau
Leverage Ratio    0.98    0.65    2.10    2.51
Mandarin Oriental Hotel Macau has the least extent to which shareholders investments are leveraged.

Wynn Las Vegas    Crown Towers    Four Seasons Hotel Macau    Mandarin Oriental Hotel Macau
Debt Ratio    3.28    0.39    0.68    2.21

On a general comparison basis, Wynn Las Vegas has higher profitability ratios compared to its competitors.  The interpretation is that Wynn Las Vegas has a higher

potential to settle most of its long-term and short-term dues. The company is therefore better placed than the rest of the seven competitors in the aspects of

profitability and liquidity.

References
Crown Resort Annual Report (2013)
Las Vegas Sands Annual Report (2013)
Mandarin Oriental International Limited Annual Report (2013)
MGM International Annual Report (2013)
Sands China Annual Report (2013)
Palmer, J. (2007). Financial ratio analysis. New York, N.Y.: American Institute of Certified Public Accountants.
Wynn Las Vegas Annual Report (2013)

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