Finance and Funding in the Travel and Tourism Sector Assignment - ATC
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Added on 2020-12-09
Finance and Funding in the Travel and Tourism Sector Assignment - ATC
Added on 2020-12-09
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Finance and Funding inthe Travel and TourismSector
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1: Importance of cost and volume in financial management of Tourism businesses..............11.2:Evaluating pricing method used by ATC..............................................................................31.3: Analysis factors that are influencing profit for travel and tourism sectors..........................4TASK 2............................................................................................................................................52.1: Analysing various types of management accounting information applicable in ATC........52.2: Application of various investments appraisal techniques ...................................................6TASK 3............................................................................................................................................73.1: Interpretation of ratios in travel and tourism financial accounts.........................................7TASK 4............................................................................................................................................84.1: Sources of finance available to internal and external departments......................................8CONCLUSION ...............................................................................................................................9REFERENCES..............................................................................................................................10
INTRODUCTIONFinance is said to be lifeblood for any business, whether related to any industry theyrequired valuable amount capital to finance their operations in appropriate manner. In accordanceto travel and tourism sector, it seems to be primary concern which will leads to make plans fordelivery superior services and travelling facilities to various tourists. According to the mentionedcase about “Akaglo Tours company (ATC)” which is estimated for planning a summer trip tosome attractive location of Maldives beach. This project report is all about determiningimportance of CVP analysis for decision making in tourism sectors. Analysis is to be done tomake use of management accounting data as a decision making tools are discussed under thisreport. Interpretation of all financial ratios those are effective helpful in tourism sectors. Lastly,sources as well as distribution of funding for formulation of capital expenses are taken intoconsideration in more effective manner in this particular report (Stewart, 2017).TASK 11.1: Importance of cost and volume in financial management of Tourism businessesTourism is primary aspects for any particular nation which is contributing maximumrevenue from the visit of tourists. Nowadays, it seems to become more vital sectors that hasmade huge influences on increasing GDP as well as growth of nations economy. The primarymotive of travel and tourism are wealth creating and generating maximum job opportunitiesduring an accounting period. In some part of regions is taken as more valuable sources of welfarethat can enhance standard of living. As per the mentioned scenario, ATC company is planning asummer trip in Maldives for one month. In respect to provide more reliable and comfort to thepeople they will be hiring a cruise and chalets. It has been determine that wide number funds canbe going to invest in the arrangements of all these things. It will directly make impacts on theproductivity and growth of the company (Baker and Corcoran, 2012). A well organise techniqueswould be used by the management to control their costs. Such as:CVP analysis: It is known as one of the main aspects that is associated with examine allnecessary changes which is related with organising trip are analyse in effective manner. It isconsider as more reliable tools which shows relationship among volume, costs, prices andcollected gains during the period. It seems to be internal parts of profit planning procedure ofATC. By using this, managers of the company would have plenty of option for an organisation to1
effectively control their financial resources in respect to attain maximum number of advantagesin near future. It would deliver insight to managers of ATC regarding all impacts andrelationship between factors and associated implications that relies upon revenues. In analysiscost and profit certain important aspects are needed to be taken into consideration. Such as:Cost: It is consider as value of amount which is delivery by managements in order toretain something. It consists of various elements like:Direct costs: These are said to be those costs which are directly livered on production orplanning of any tours. There are numerous costs which would incurred but cannot be possible tocontrol (Ciplet, Roberts and Khan, 2013).Indirect cost: All those costs those are indirectly charged by the travel and tourismcompany for the delivery services to people. It is categories into two parts such as fixed andvariable costs.Fixed costs: It refers as those are costs which remain unchanged with the production ofproducts and services during the period of trip journey. This will arises with the purchase of anyaccommodation facilities from tourist in Maldives. Examples, Rent and telephone charges.Variable cost: It is said to be that costs which can be changes or alter with accommodation andservices delivery in tourism and tour sectors. It consists of certain costs such as material andlabour etc.Allocation and apportionment: According to this particular aspects which wouldprovide effective matters those are related with costs of various departments for evaluating actualgain generated by the company. This seems to be related with various business operations doneby ATC group. By using this, company would be able to manage and control their additionalexpenses. Volume: It consists of various aspects those are effectively helpful in tourism sectors.Such as:BEP analysis: This seems to be more effective aspects which would assist them todetermine amount of total sale and profit position of the company. It is used to analyse breakeven stage in which company would not have any profit and loss (Drehmann and Nikolaou,2013).2
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