Finance in the Hospitality Industry Report
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Added on 2020-07-22
Finance in the Hospitality Industry Report
Added on 2020-07-22
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FINANCE IN THEHOSPITALITY INDUSTRY
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................31.1 Identification of various financial resources which will be assistive to Belgravia Hotels....31.2 Evaluating the contribution of different methods in generating income...............................5TASK 2............................................................................................................................................62.1 Ascertaining the adequate elements of costs and profits and their effective influences insetting the prices over business services......................................................................................62.2 Analyzing the techniques to administered stock controlling and presenting methods forcosts and benefits.........................................................................................................................9TASK 3..........................................................................................................................................103.1 Assessing the sources of business performance in relation with making the effectiveanalysis through trial balance....................................................................................................103.2 Evaluating business accounts adjustments and notes..........................................................113.3 Demonstrating the purpose and process of budgetary control.............................................113.4 Analyzing budgetary variances in the context of chosen organization...............................12TASK 4..........................................................................................................................................124.1 Interpreting the business performance on the basis of ratio analysis..................................124.2 Recommendation on the basis of future management strategies helpful in improvingbusiness performance.................................................................................................................141
TASK 5..........................................................................................................................................145.1 Determining the various kinds of costs...............................................................................145.2 Measuring the per customer or per product contribution which will be assistive inanalyzing the relationship between cost profit and volume.......................................................155.3 Determining the usefulness of break-even point and short-term decision making.............17CONCLUSION..............................................................................................................................18REFERENCES..............................................................................................................................192
INTRODUCTIONTo have managed business operations as well as set targets this in turn will be effectivefor the revenue generation as well as growth of the entity. Therefore, in relation with analyzingthe effectiveness of various budgetary and costing techniques the analysis over financialstatements of the business will be helpful to the managers in decisions making. In the presentassessment there will be analysis over the various operations made by Belgravia Hotels.However, the study comprises with the various costing budgeting techniques which will beassertive to the managers of this hospitality industry in terms of analyzing the prices over theservices. It also comprises with the discussion based on break-even point as well as the shortterms financing technique which will make improvements in the operational practices.TASK 11.1 Identification of various financial resources which will be assistive to Belgravia HotelsOperating a business on a domestic and global level there can be essential requirementsof the financial funding. There can be various sources which will bring the satisfactory amountof gains to the Belgravia Hotels. Therefore, in a hospitality industry there are severaldepartments and each of them have the different level of funds required. It can be used forpurchasing material, maintaining accommodation or infrastructure facilities, salaries toemployees etc. which can be gathered from various sources (Sipe and Testa, 2018). Moreover,the need of satisfactory capitals from the market there are various sources which will be assistivesuch as:Internal sources of finance:These are the sources which helps the professionals of the business to gather the effectiveamount of funds from the internally available sources. It will be through the revenue gained by3
the business through its operations as well as the contribution made by the directors. Therefore,the main advantage from collecting funds through internal sources is that there is no need ofmaking payment of any interest (Peters and Kallmuenzer, 2018). Similarly, Belgravia Hotels willprocure the funds through several sources such as:Retained earnings: These are the profits which are generally retained by the developingor growing corporations. It is the amount which is not being distributed by the professionals totheir members in the form of dividends (Pérez-Pineda, Alcaraz and Colón, 2017). Therefore, useof such funds for the operational activities. In relation with the Belgravia Hotels it will be helpfulas if they will have the appropriate amount of earnings and utilize it in the operationalfunctioning of the entity.Working capital management: These are the funds which are generally required fordaily operational activities of the business. Therefore, it can be used by the firm in terms ofmaking the day to day operations. There can be two sources of techniques which help ingathering the funds such as sales and payments to creditors. It insists that Belgravia Hotels willhave adequate revenue gains from the sales of its services which will be beneficial in developingthe operational efficiency as well as bring the optimum amount of funds for the operations (Munand Jang, 2017). On the other side, it has been assumed that if the business makes delays inmaking the payments to its creditors which will also be effective in retaining the funds.Therefore, there can be use of various operational activities which in turn bring the adequateamount of revenue to the professionals.External sources of finance:There can be use of various external sources which in turn makes effective gains to thebusiness. Therefore, the implications of various sources which will be helpful in retaining theadequate amount of funds, but there are is major disadvantage is that with all the sources acompany is acquiring funds needs to make payments of the proportionate returns. Moreover, itwill be a revenue sources to the parties who makes their investments in the business or from4
whom the entity has acquired funds (Jung and Yoon, 2018). Similarly, Belgravia Hotels willhave satisfactory funds from the sources like:Equity shares: These are the sources which will be beneficial to the industry in relationwith having large numbers of monetary benefits. Therefore, selling securities in market whichwill bring higher market value of entity as well as it brings required amount of capital gains.Additionally, the equity holders make investments in the firm in relation with attaining theappropriate future gains in terms of dividends (Munjal and Bhushan, 2017). Therefore, BelgraviaHotels has to make a satisfactory dividend policy which in turn brings effective satisfactionamong shareholders.Loans: The desired level of funds will be obtained by the business as to have appropriategains from taking loans through banks and financial institutions (Ali, 2018). Therefore, they willrequire the interest on loan till the loan amount ids fully payable by the business. BelgraviaHotels will meet the requirements of funds from taking loans through banks and financialinstitutions.Governmental grants: Belgravia Hotels can have funds from the governmental grants forthe purpose of meeting the operational requirements. Therefore, these are the welfare institutionwhich helps in promoting the growing business to have appropriate business activities anddeveloped themselves (Arbelo and et.al., 2017). Moreover, these are the most effective andsatisfactory sources which will be helpful to the hospitality industry.Sale of assets: the sale of non useful assets will be helpful in generating the appropriateamount of funds. Therefore, Belgravia Hotels needs to sale the assets which are not in use orhave huge depreciable value (Sipe and Testa, 2018). Therefore, these are the assets which areneeded to be sold out in the market. In relation with the assets like land, building etc which willbe helpful in giving the bulk revenue to the business.5
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