Finance and Funding of Merlin Entertainments plc- Report
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Added on 2020-02-05
Finance and Funding of Merlin Entertainments plc- Report
Added on 2020-02-05
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Finance and Fundingin travel and tourism1
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................31.1 Importance of costs and volumes in financial management of Merlin Entertainments plc...31.2 Pricing method used in tourism sector...................................................................................51.3 Factors effects profits for Merlin Entertainment plc tourism................................................7Task 2...............................................................................................................................................82.1 Different types of management accounting information used in Merlin Entertainment plc.82.2 Importance of management accounting information as decision making tool for MerlinEntertainments Plc.......................................................................................................................8TASK 3............................................................................................................................................83.1 interpretation of financial accounts for decision-making in travel and tourism....................84.1 Sources and distribution of funding for DEVELOPMENT of capital projects withintourism.......................................................................................................................................12CONCLUSION..............................................................................................................................14REFERENCE.................................................................................................................................152
INTRODUCTIONFinance refers as provision of money which is related with investment and managementof costs. It is activity of fund allocation and financial management of money to achieveorganization's effectiveness. In this regard, funding terms as analyzing financial resources toallocate funds and for short term and long objectives of entity.The present report is based onfinance and funding of Merlin Entertainments plc in travel and tourism sector. It is public limitedtourism of UK provides traveling and accommodation services to customers at high level.Including this, there are million employees working for tourism services at workplace and largenumber of branches are available for business operations. Through this study, Significance ofcosts in financial management and pricing methods used in tourism can be determined.Moreover, various types of management accounting information and decision-making tools forfund allocation can be expressed. In addition to this, the report will effectively present the datainterpretation regarding funding for tourism financial accounts. However, proper analyses ofsources and distribution for financial management can be understood here.TASK 11.1 Importance of costs and volumes in financial management of Merlin Entertainments plcMerlin Entertainment is the wide spread entertainment company and has differentbranches around 23 countries in four contents. It has expanded its business and makes place inglobal market through effective financial as well entire management of organization to operatethe entity efficiently. In this regard, management related to fund allocation includes economictools such as costs, volumes (Frittelli, 2013). There are different kinds of costs which includesdirect, indirect, fixed and variable costs which are valuable for effective business operations. Inaccordance to this, manager of tourism prepares plan to allocate fund for the financialmanagement. Price determination regarding actual expenditure Including cost of raw materials,advertisement expenses, price obtained during marketing of services. It is useful for costeffectiveness and proper funding for traveling and tourism operations. However, manager of theindustry concentrate on different costs which includes retained earnings, expenses andinvestments, price of materials, tax and other tools on which business activities are operated. 3
Therefore, manager of Merlin Entertainment tourism manages funds to operate businessactivities effectively. It is considered that cost effectiveness is valuable to increase efficiency oforganization's services including traveling and accommodation for its effectiveness. Thus, costplays crucial role in financial management of the fund allocation (Clark and Das, 2015). Itincludes analyses of tourism services' price as sources and investments for the businessoperations. Through recognition of proper fund allocation, financial manager of tourism makesdecisions for business activities. Moreover, volumes plays vital role in financial managementwhich includes break even analyses, economics of scale. It is the activity related to identificationof fund allocation and effective cash flow and fund flow tools. In relation to volume, actualperformance of tourism is determined on behalf of which the manager of entity makes decisionfor effectiveness and efficient market position. Hence, under cost and volume structure,systematic structure of economic position is determined which leads in generating idea forsource and investments. Thus, cost and volume is considered as essential tools for financialmanagement of Merlin Entertainment tourism services (Hanna, 2014). Some of the significantrole of cost and volume in financial management can be expressed as follows:-Effective cost structure: -Financial management of Merlin Entertainment Plc is analysesthrough recognizing cost structure for tourism services (Merlin Entertainment Plc, 2016). Itincludes identification of balance between expenditure and revenue on behalf of which managerimplements financial management of funds. It is valuable to prepare plans for further businessactivities such as expansion, developing balance between demand and supply of resources andincreasing profit earning capacity of the firm. Moreover, it is able to identify accurate marketposition and demand for service qualities. It influence in making decision for balanced economicstructure. It is helpful in generating ideas for sources and investments related to cost efficiency.However, price determination and forecasting helps in increasing revenue and reduction ofunwanted expenses (Crépey, 2015). Therefore, actual cost structure is presented to enhanceworking efficiency of the business organization.Systematic allocation of fund: - Merlin Entertainment plc properly manage the bycreating balancing between expenses and investment. It is determined that fund allocation is thekey element to operate business entity effectively. It is vital for tourism to focus upon sourcesand investment factors related to financial management influences expansion of business entity.4
Thus, costs and volume plays crucial role to manage finance as effective as possible. It is able togain optimum utilization of resources in production and distribution system of traveling andaccommodation services (Fowles, 2014). Decision making tool for systematic business operations:- Merlin Entertainmentprepares plan for fund allocation on the basis of recognizing economic structure of tourismservices. Similarly, its is useful to achieve effectiveness of organization with increasing profitearning capacity. In this regard, effective fund allocation and economic growth of tourism isdetermined. Moreover, it generates creative ideas for providing systematic tourism services tothe tourists. It is useful technique used by manager to implement strategic plans for fundallocation through financial management and economic growth of tourism (Ciplet, Roberts andKhan, 2013).1.2 Pricing method used in tourism sectorMerlin Entertainment plc determines . cost for influence tourism services. This pricingincludes cost of goods and services, expenses and investments etc. Therefore, financial managerof the company decides price for effective business operations. In accordance to this, financialmanager of Merlin Entertainment Plc applies different pricing methods to determine cost oftourism services. Such as; cost plus pricing, demand based pricing, competition based pricingand other methods to decide price for product as well industry effectiveness. Some of theimportant pricing methods can be determined as:-Cost plus pricing: - It is one of the simplest methods to determine cost of tourismservices in which aggregate cost as income or profit is added to selling price of the product. Forinstance, if Merlin Entertainment plc bears £ 100 per unit for providing traveling services andadds £ 50 per unit to this price then, final cost of traveling service would be £150. Therefore,cost plus pricing is effective determinant for deciding price of tourism services (Zhang and et.al.,2016). Demand based pricing: - Under this pricing method, financial manager of the companydecides cost for product by analyzing Cost for tourism services. Therefore, conducting marketresearch and demand for product is useful in deciding cost of tourism services. For example;Heritage tourism of England determines price for tourism services according to demand basedpricing. It analyzes market research and customer opinion related to traveling and5
accommodation facilities of the organization. On behalf of which, manager of company decidesprice for services (Valverde and et.al., 2016). Moreover, under demand based pricing, various factors are recognized as priceskimming, price discrimination and price penetration. Where, price skimming factor is related tovery high pricing for products. It aims to provide qualitative services and maintain attraction ofhigh standard tourists for tourism demand. It influences customer loyalty for effective services.In addition to this, Heritage tourism determines different price for same products on behalf ofdemand. In price discrimination process, if customer demand for services for urgency thenmanager fixes extra charge for emergency services. However, price penetration factor is differentform price skimming method, under which manager decides price on behalf of economiccondition of various tourists. Therefore, adequate costs for tourism is determined through thisprocess. Hence, manager of Heritage tourism decides tourism services price as per marketdemand and tourists perception towards organization's facilities (Petty and et.al., 2015). Competition based pricing:- This pricing method is related to determination of costaccording to market competition. In this regard, financial manager of company decides cost oftourism services as per analyzing competitive strategy. It is related to set prices regarding marketposition of products. Moreover, recognizing market research is able to change pricing on behalfof identifying tourists attitude and perception towards tourism services (DRURY, 2013). Forexample, British museum of UK is tourism provides services of traveling and accommodationthrough determining cost for services to face competition. Therefore, organization determinescost through market research and also changes price according to market position of goods andservices. It creates interrelationship between pricing tools and competitive strategy to maintaingood reputation of entity in competitive market. Regarding this, financial manager of tourismcreates changes in price determination for effective services (Cole and et.al., 2013). It is valuablefor proper management of resources and aware society for tourism services attractively. Thus,competition based pricing is useful for effectiveness and sustainability of effective tourismservices to face competition. However, it is determined that entity can increase its efficiency tobe prepare for benefited in competitive marketing issues. Therefore, financial management offirm is done through determining cost as per competition to maintain good reputation in market. 6
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