Significance of Costs and Volume in Managing Financials within Merlin Entertainment Plc

FINANCE AND FUNDING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Explaining significance of costs and volume for managing financials within Merlin
Entertainment Plc...................................................................................................................1
1.2 Analysis of those strategies which are adopted by the travel and tourism firms in order to
determine effective selling prices...........................................................................................2
1.3 Description of factors affecting to the level of profitability of Merlin Entertainment Plc4
TASK 2............................................................................................................................................5
2.1 Explanation of various kinds of management accounting information which used by
Merlin Plc...............................................................................................................................5
2.2 Assessing management accounting information as a tool of decision making within Merlin
Entertainment Plc...................................................................................................................5
TASK 3............................................................................................................................................5
3.1 Interpreting financial accounts of The Restaurant Group Plc (TRG) with the help of
various financial ratios...........................................................................................................5
TASK 4..........................................................................................................................................10
4.1 Analysing sources which provide fund to the company in order to develop projects....10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INDEX OF TABLES
Table 1: Calculation of Ratios for The Restaurant Group...............................................................5
ILLUSTRATION INDEX
Illustration 1: Comparison of Current Ratio....................................................................................7
Illustration 2: Comparison of Debt Equity Ratio.............................................................................8
Illustration 3: Comparison of Capital Gearing Ratio.......................................................................9
Illustration 4: Comparison of ROCE.............................................................................................10

INTRODUCTION
In the corporations, there are several types of industries playing major role and one of the
mostly frequent is like travel and tourism sector. It is one of the fastest developing segment and
contribute in the growth rate of economy to a great extent. Moreover, finance plays crucial role
in every company for operating in the market and expanding business. The present study is based
on Merlin Entertainment Plc (MEP) which operates in the travel and tourism industry and
provides services across 23 countries in the world. The current project focuses on strategies
which are used to make pricing decisions and importance of the cost volume analysis within
cited company. Further, aspects which influence the cited organisation's profitability are also
explained over here. Beside this, different management accounting information described in this
study which are supportive in terms of taking business decisions. Moreover, financial
performance of The Restaurant Group Plc is measured and analysed in proper manner by
considering the financial ratios. At the end of report, sources and tools are identified which allow
businesses in order to raise fund within workplace.
TASK 1
1.1 Explaining significance of costs and volume for managing financials within Merlin
Entertainment Plc
Cost is one of the very sensitive factor and having crucial place within working
environment of the business. Those expenses which are incurred by the firm for producing
products and services are known as cost. Further, on the basis of this specific aspect management
of Merlin Entertainment Plc (MEP) is capable to make different decisions. There are several
kinds and categories of costs included in travel and tourism sector which are fixed, variable,
direct, indirect, production etc (Baker and Corcoran, 2012). Further, significance of the costs as
well as volume of output of products and services within the working environment of Merlin Plc
is as follows:
Cost allocation: With help of all the costing and expenses, the firm can determine that in
which ways financial resources should be allotted to different cost centres. If cost allocation
system is not effective in the firm then it will hamper overall functioning of business which is a
sign of reducing productivity. In addition to this, the firm must allocate the expenses in proper
ways which helps to decline total cost of production and prices as well. Ultimately, Merlin Plc is
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