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Report of Finance in the Hospitality Industry

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Added on  2020-06-03

Report of Finance in the Hospitality Industry

   Added on 2020-06-03

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Finance in the Hospitality Industry
Report of Finance in the Hospitality Industry_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Reviewing sources of funding which are available to business and service industries.........11.2 Evaluating range of methods that contribute in income generation......................................5TASK 2............................................................................................................................................6TASK 3............................................................................................................................................6TASK 4............................................................................................................................................63.1 Assessing the sources and structure of trial balance..............................................................63.2 Evaluating business accounts, adjustments and notes...........................................................74.1 Calculating ratios to assess business performance................................................................94.2 Recommending appropriate future management strategies.................................................11TASK 5..........................................................................................................................................125.1 Classifying cost in terms of fixed, variable and semi-variable............................................125.2 Calculating contribution per product and explaining CVP relationship..............................125.3 Taking short-term management decision on the basis of profit or loss potentials and BEPanalysis......................................................................................................................................14CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16
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INTRODUCTIONFinancial management is essential within the hospitality sector for the attainment of goalsand objectives. In the recent times, hotel unit can enhance productivity and profitability onlywhen it delivers high quality services to the customers. Further, level of competition is also stiffin the hospitality sector which in turn directly influences profit margin of firm. In this regard,finance manager of the firm has accountability to make suitable assessment of cost and lay highlevel of emphasis on developing competent plan. Now, companies which are operating inhospitality sector needs to conduct research for assessing the expectation level of customers.Hence, by allocating funds to each business activity in a optimal way firm can attain success to agreat extent. The present report is based on different case scenarios which will provide deeperinsight about the sources that can be undertaken by business entity for meeting financialrequirement. Besides this, it will shed light on the sources that assists firm in generating moreincome. It will also develop understanding about the aspects of financial accounting such as trialbalance, income statement and balance sheet. In this, report will highlight the extent to whichfinancial position and performance of R. Riggs is sound. Report will also entail how BEPanalysis aid in decision making and makes contribution in the attainment of goals. TASK 11.1 Reviewing sources of funding which are available to business and service industriesOn the basis of cited case situation, business entity of small business enterprise requires£450000 for purchasing new building. In this, there are several internal and external sourcesthat can be undertaken by the firm for meeting monetary needs pertaining to capital expenditureor investment. Hence, major internal and external sources which are suitable for this purposeenumerated below: Internal sources
Report of Finance in the Hospitality Industry_3
Retained profit: In order to deal with the undesirable situations business entity lays highlevel of emphasis on retaining some amount rather than investing the whole. Hence, by usingsuch fund entrepreneur can meet financial needs and requirements to the significant level. Advantages:Disadvantages In this, owner of the firm is free from fixedobligation in terms of interest payment(Brotherton, 2012). When business unit uses whole retained profitfor meeting requirements then they would notbe in position to deal with the future contingentsituation. Friends and family members: By taking financial assistance from friends and familymembers owner of small business unit can generate funds. Advantages:DisadvantagesLess interference in decision making Absence of both monetary and non-monetary obligations Sometimes, business entity faces difficulty inconvincing family members towards the plan.This aspect imposes issue in front of firmpertaining to raising funds. Sales of fixed assets: Sole trader can also generate funds by selling fixed assets whichare not used in productive activities. Every business unit has some scrap in the form ofmachinery, other equipments etc (Internal Source of Finance, 2017). In this regard, by sellingsuch unused assets entrepreneur can raise fund and thereby would become able to implementplan. Advantages:DisadvantagesLow cost is the main advantage whichis associated with the selling of assets.Moreover, in this, by placingadvertisement in the newspaper firmcan attract potential investors. Facilitates quick generation of funds In the case of quick selling of assets,sometimes business unit does not receivesuitable amount. Reduction or controlling of working capital: Business entity can meet monetary needsand requirement by making control on working capital. In accordance with such aspects by
Report of Finance in the Hospitality Industry_4

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