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CVP Analysis in Travel and Tourism Finance and Funding in Travel and Tourism INTRODUCTION 3 TASK 14 a. Definition of CVP Analysis and its importance in financial management

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Analyzing the sources of funds that can be used by CHTC to obtain fund or finance 11 CONCLUSION 12 REFERENCES 12 INTRODUCTION Travel and tourism sector of UK is growing significantly as compared to the before times. Defining the concept of CVP analysis and its importance in financial management Cost volume profit analysis can be used by an entity to determine the changes in volume of operating income and net income due to change in cost and volume of product. The most important part of CVP analysis

CVP Analysis in Travel and Tourism Finance and Funding in Travel and Tourism INTRODUCTION 3 TASK 14 a. Definition of CVP Analysis and its importance in financial management

   Added on 2020-01-28

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Finance and Funding in Travel and Tourism
CVP Analysis in Travel and Tourism Finance and Funding in Travel and Tourism INTRODUCTION 3 TASK 14 a. Definition of CVP Analysis and its importance in financial management_1
Table of ContentsINTRODUCTION ..........................................................................................................................3TASK 1............................................................................................................................................4a. Defining the concept of CVP analysis and its importance in financial management ............4b. Analyzing the methods that can be used by CHTC for setting prices....................................4c. Analyzing the factors that have high level of impact on the profit margin ..........................5TASK 2............................................................................................................................................6A. Assessing the different types of management accounting information that can be used byCHTC for decision making ........................................................................................................6b. Evaluating the use of investment appraisal techniques in decision making .........................6TASK 3 ..........................................................................................................................................8A. Interpreting the financial statements of Thomas Cook ‘........................................................8TASK 4..........................................................................................................................................11a. Analyzing the sources of funds that can be used by CHTC to obtain fund or finance ........11CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................12
CVP Analysis in Travel and Tourism Finance and Funding in Travel and Tourism INTRODUCTION 3 TASK 14 a. Definition of CVP Analysis and its importance in financial management_2
INTRODUCTION Travel and tourism sector of UK is growing significantly as compared to the beforetimes. From data evaluation, it has been assessed worth of tourism industry worth of tourismindustry will over £257 billion at the end of 2025. Along with this, travel sector of UK makesremarkable contribution in GDP such as 9% by offering employment opportunities to the largenumber of people. Hence, effective management of fund in tourism sector is highly required toachieve the aims and objectives(Ambrosie, 2015). The present report is based on Carib HappyTours Company (CHTC) which is planning summer holiday trips for the customers. In this, the
CVP Analysis in Travel and Tourism Finance and Funding in Travel and Tourism INTRODUCTION 3 TASK 14 a. Definition of CVP Analysis and its importance in financial management_3
present report will describe the financial tools and techniques that aid in the profitable decisionmaking. Further, report will also shed light on the financial health and performance of ThomasCook which is the leading travel firm of UK. TASK 1a. Defining the concept of CVP analysis and its importance in financial management Cost volume profit analysis can be used by an entity to determine the changes in volumeof operating income and net income due to change in cost and volume of product. This analysisis supported through various assumptions. First of all this analysis theory assumes a constant saleprice per unit as well as it also assumes constant fixed cost(Becker, 2016). CVP analysis is veryuseful for the management in order to control the factors which make changes in level ofrevenue. The most important part of CVP analysis is that the point where the total revenue ofcited entity is equal to total cost of products which includes both fixed and variable cost. Thispoint is termed as Break Even Point, which means this is level of sales at which there is no lossand no profit(Buhalis and Darcy,2011). There are three elements of cost volume profits analysisi.e. cost, volume and profit. Cost means the expenses which occurred during the production andselling process of product and services on the other hand volume means total number of unitswhich an entity manufacture in a certain period and profit is the excess of revenue over totalexpenses. The importance of cost volume profit analysis is mentioned below :CVP analysis assist an entity to ascertain the contribution margin for the current period.Contribution is the excess of sales over variable expenses. Through it a company can ascertain the its break even points which assist managementof cited entity to get acknowledged of the level at which total expenses get equal to totalrevenue of cited entity(Cole and Morgan,2010). That means after that level theorganisation will start earning profit.b. Analyzing the methods that can be used by CHTC for setting pricesThere are different methods through which a firm decides it s price. The marketingmanager decides different techniques for setting up the price. Following are some methods onwhich the prices are decided.Mark up price method: This is the most commonly used method for setting up the prices.
CVP Analysis in Travel and Tourism Finance and Funding in Travel and Tourism INTRODUCTION 3 TASK 14 a. Definition of CVP Analysis and its importance in financial management_4

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