VP Of Finance Case Study: Shekelhound

Shekelhound ruled over the hotel division and all of its development for nearly two decades. He intimated, during the infamous poker games, that he planned to retire and this would probably be his last year of running the division. He was sixty-five years old with a number of health issues and he had a golden parachute worth one and a half million dollars. During one of his less sober moments, he divulged how much he liked traveling and managing the hotels so he thought maybe he would not retire. Flintstone, who reported directly to the VP of Finance, decided to mention this comment to his boss during Shekelhound's visit. The next day Shekelhound was summoned by the Real Estate President, Scrooge, to immediately return to the corporate office …show more content…
Visiting and compiling financial evaluations of dozens of different hotels throughout the region and the country became routine. The process became much more involved and much more cumbersome than All-in and had anticipated, as he would regularly find a promising project, but the financing would not work so they would take a pass. Oftentimes, he found a good project only to be outbid by larger corporations looking for much lower returns on their investments. Looking for the home run and a high rate of return on the investment created a high hurdle. Throughout this process, Japes informed All-in that the best returns on investment are limited service hotels which have less risk, less overhead, less operational expense, and have easier exit strategies. The marching orders, however, were to find a full-service hotel in a great location, which returned greater monies. These situations were few and far between as the industry evolved and investors realized that it was a hard way to make a buck. All-in would do as directed and continued to look for this needle in a haystack. At one point, All-in gave Japes a lead on a hotel for sale in the heart of the city. An old hotel with no franchise affiliation and only one hundred rooms with an asking price of $6 million for an all-cash deal presented a windfall. To Japes, this looked like a no-brainer as the land alone valued at least six million dollars without any building on it. Furthermore, the location, surrounded by government offices and sporting venues appeared ideal. Scrooge would not even entertain the idea of doing a financial analysis. The hotel sold for the asking price and is today an extremely successful boutique hotel returning millions of dollars annually to the owners. Japes suggested All-in look at “Rearview Hotels”, then maybe the owners would bite. If there was no history for the bean counters to