Principles for monitoring and managing financial performance of hospitality industry

This report discusses the principles for monitoring and managing financial performance in the hospitality industry, using Carnival Corporation as a case study. It covers topics such as arranging finances, preparing financial statements, risk and return, double entry bookkeeping, and diversity principle. The report also explores the HR life cycle and its application in specific hospitality roles, as well as the importance of developing and retaining talent. Additionally, it examines specific legislations and their impact on businesses, and the relation of different functions and roles in the hospitality sector. Communication methods, coordination, and monitoring in the department are also discussed.

The BUSINESS
TOOLKIT

Table of Contents
INTRODCUTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Principles for monitoring as well as managing financial performance of hospitality
industry .......................................................................................................................................3
P2 Application of double entry book keeping system in order to record sales and purchases in
general ledger..............................................................................................................................4
P3 Preparation of basic trial balance using balance off rule.......................................................5
TASK 2............................................................................................................................................9
P4 All stages of Life Cycle of HR applied on specific hospitality roles and its importance in
developing and retaining talent-..................................................................................................9
P5 Development of a performance management plan for Carnival Corporation Plc...............10
Task 3 ............................................................................................................................................11
P6 Identification of specific legislations which are to be followed by Carnival Corporation. .11
P7 Illustrations showing how company, employment and contract law have impact on
businesses..................................................................................................................................12
TASK 4 .........................................................................................................................................13
P8 Relation of different functions and roles in hospitality sector.............................................13
P9 Define various communication method, coordination and monitoring in the department. .15
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODCUTION
Hospitality industry includes a vast variety of service industry such as food and
beverages, lodging, parks, travelling and transportation, and other such services in tourism
industry (Oosthuizen, 2017) . This industry focuses on increasing satisfaction of customers in
order to enhance their experience. They aim in providing best quality services to their customers.
Other then providing good quality services it also includes planning, coordinating and managing
various departments of services in a proper manner. Following report is in reference with
Carnival corporation & plc, it is a huge travel leisure organisation. Headquarter of Carnival
Corp. Plc is based in Florida, United States. In this report financial status of firm is judged with
the help of trial balance and ratios. It also discusses HR life cycle, various rules and laws related
to industry and communication methods used by business in order to reach their goals
effectively.
TASK 1
P1 Principles for monitoring as well as managing financial performance of hospitality industry
Principle are already set rules, guidelines and techniques which help in interpreting and
analysing financial performance of a business. These principles are responsible for improving
performance of Carnival Corporation. It helps in achieving the targeted goal of an organisation
within a set period of time. The principles which help an organisation in doing so is mentioned
below-
Arranging Finances- Every organisation needs to take good decisions when it comes to
financing. Arrangement of finances for is very crucial part for every organisation as these
finances offers proper functioning of businesses. With arrangements of required finances from
best sources available Carnival Corporation is functioning in an efficient and effective way. This
also helps in saving organisation from any kind of uncertainties and risks. Carnival Corporation
uses various institutions like banks because they are safest. They provide loans at low interest
rates also a proper agreement is made in between institution and organisation while transferring
funds so that no future conflicts occur.
Preparing financial statements- In order to manage and monitor financial performance
preparation of financial statement is necessary. Without these statements it is difficult to judge
financial position of company. In Carnival Corporation financial statement is prepared which

includes trial balance, profit&loss accounts, balance sheet and cash flow statements. All these
accounts given above are prepared in same chronological by organisation once every year. They
are generally prepared at the end of financial year. It is duty of accounts department to look after
preparation of these reports. These are necessary for an organisation so as to ascertain its
financial standing in market.
Principles of risk and return- Principle of risk and return mentions that in order to
attain returns in a business it is necessary for firms to take risks. Risk is an important factor as
higher risks help gain higher returns and also enhances brand image (Jiang and Canny, 2017).
This principle is effectively used by Carnival Corporation in order to gain profits. They took risk
by investing huge funds in their premises to make it look eye catching. Carnival also provide
discounts and offers from time to time in order to increase their customer base.
Principle of double entry and book keeping- This principle states that there are two
sides which are debit and credit, and both of these sides require necessary entry of each financial
transaction taking place in organisation. Principle of bookkeeping states that it is necessary to
record all the transaction and have proof of them. In this document and statements are prepared
in order to figure out amount of profits. Carnival Corporation uses this function so as to maintain
proper records and know about profits they are generating from business.
Diversity Principle- It is a process in which allocation of capital is one in such a way so
that risks to a single asset can be reduced as much as possible. It is basically investing in a
number of assets in order to reduce volatility and risks. Carnival corporation uses this principle
to save their assets and minimum exposure of risk is given to them. Within a portfolio more than
one asset is used so that risk can be distributed among them and losses in one asset can be
covered by profits gained from another asset.
P2 Application of double entry book keeping system in order to record sales and purchases in
general ledger
Double entry bookkeeping in accounting states that for every transaction there are two
entries made in two different accounts. Every entry in one account needs an opposite entry in
some different account. There are two different sides for this known as debit and credit. These
are business transactions whose amounts are recorded in two different accounts. In this amounts
are once filled in debit side and then in credit side (Carvey, 2018). Following are ways in which
Carnival Corporation record its sales and purchases:

 In this system expenses and income are also tallied well together taking sales and
purchases into account.
 Expenditures which were incurred by organisation are categorised as material, capital,
advertising, labour etc.
 Payments of bill is made on time looking over all the expenses on specified date
mentioned.
 Receipts are noted and entries for them are made considering date and amount of
transaction.
P3 Preparation of basic trial balance using balance off rule
Trial Balance is a list of all the general ledger accounts which are created after journal
entry. Book keeping helps in its preparation effectively. It is ultimate goal of trial balance to
make sure that every business transaction is mentioned in ledger and are properly balanced. In
Carnival Corporation management records every information to draft financial statement which
involves every entry which helps in knowing profits.
A number of steps are included in preparing a trial balance (Urgo and Terkaj, 2019). These steps
are mentioned below:
 A worksheet with three columns are created which are debit, credit and transactions.
 Account titles are filled thereafter and balance is recorded in appropriate manner in debits
and credits.
 Totalling of credit and debit column is done so as to identify whether any difference
between these exist.
 The reason for difference between these two is then found out and correction for it is
made.
Date Particulars Debit Credit
01/04/16 Cash a/c 180000
To capital a/c 180000
10/05/16 Purchase a/c 130000

To cash a/c 130000
15/06/16 Purchase a/c 6000
To cash a/c 6000
01/07/16 Cash a/c 8000
To sales a/c 8000
01/08/16 Purchase a/c 9000
To cash a/c 9000
01/09/16 Sundry expenses a/c 200
To Bank a/c 200
01/10//16 Cash a/c 17000
To sales a/c 17000
01/11/16 Wages a/c 2100
To cash a/c 2100
01/12/16 Postages cost a/c 300
To Bank a/c 300
Ledger accounts
Cash a/c

Date Particular Amount Date Particular Amount
01/04/16 To capital a/c 180000 10/05/16 By Purchase a/c 130000
01/07/16 To sales a/c 8000 15/06/16 By Purchase a/c 6000
01/10//16 To sales a/c 17000 01/08/16 By Purchase a/c 9000
01/11/16 By wages a/c 2100
31/03/17 By balance c/d 57900
205000 205000
Bank a/c
Date Particular Amount Date Particular Amount
31/03/17
To balance
b/d 500 01/09/16
By Sundry expenses
a/c 200
01/12/16 By Postages cost a/c 300
500 500
Purchase
a/c
Date Particular Amount Date Particular Amount
10/05/16 To cash a/c 130000 31/03/17 By balance c/d 145000
15/06/16 To cash a/c 6000
01/08/16 To cash a/c 9000
145000 145000

Sales a/c
Date Particular Amount Date Particular Amount
31/03/17
To balance
b/d 25000 01/07/16 By cash a/c 8000
01/10//16 By cash a/c 17000
25000 25000
Postage cost
a/c
Date Particular Amount Date Particular Amount
01/12/16 To Bank a/c 300 31/03/17 By balance c/d 300
300 300
Sundry
expenses
a/c
Date Particular Amount Date Particular Amount
01/09/16 To Bank a/c 200 31/03/17 By balance c/d 200
200 200
Wages a/c
Date Particular Amount Date Particular Amount
01/11/16 To cash a/c 2100 31/03/17 By balance c/d 2100

2100 2100
Capital a/c
Date Particular Amount Date Particular Amount
31/03/17
To balance
b/d 180000 01/04/16 By To cash a/c 180000
Trial Balance
Particular Debit Credit
Cash 57900
Sales 25000
Purchase 145000
Sundry expenses 200
Wages 2100
Postage cost 300
Bank 500
Capital 180000
205500 205500
Question 2
Ratio calculation
Current ratio = Current assets/Current liabilities
For 2014 = 4926/1508 = 3.26
For 2015 = 7700/5174 = 1.48
Operating profit margin = Operating income/Revenue
For 2014 = 914/9482*100 = 9.63%

For 2015 = 1042/11365*100 = 9.17%
Days trade receivable = Trade debtors/receivable*365
For 2014 = 2540/9482*365 = 97.77 days
For 2015 = 4280/11365*365 = 137.45 days
Sales revenue to capital employed = Sales/capital employed
For 2014 = 9482/8305 = 1.14
for 2015 = 11365/5094 = 2.23
Return on capital employed = EBIT/COE
For 2014 = 914/8305*100 = 11.005
for 2015 = 1042/5094*100 = 20.455
TASK 2
P4 All stages of Life Cycle of HR applied on specific hospitality roles and its importance in
developing and retaining talent-
HR life cycle refers to management of job of employees, task allotted to them and steps
taken to complete task(Westfall, 2016). Human Resource department is held responsible for all
activities and functions which are responsible to enhance profitability and productivity in an
organisation. Each stage in HR life cycle shows various opportunities and challenges which
helps a business in running efficiently. These stages are mentioned below:
Recruitment- It is initial stage of HR life cycle. In this stage each job in company is
provided with a right candidate who can finish the job. In Carnival Corporation managers of HR
look for suitable candidates who can fulfil the needs of job which are required to be filled. Once
they find out someone with capabilities of fulfilling all requirements for the job they are placed
at wok. While interviewing for job roles candidates are asked about job roles and how does their
capabilities match job requirements. Selecting talented, skilled and experienced employees can
be easily retained by company. Example of recruiting F&B manager in Carnival Corporation will
be done only when skills of applicant matches job roles and requirements.
Education- This is second stage in which newly hired employees are informed about
their job roles and responsibilities(Wardrop, Wishart and McMahon, 2016). In Carnival
Corporation new employees are trained and orientation is provided in order to show them culture
of organisation. Employees are made familiar with their departments. Already existing

employees introduce themselves to new employees. They are made comfortable in organisation
so that they do not think of leaving work.
Motivation- In this step employees are motivated to work better in organisation. Carnival
Corporation uses this step to motivate their new employees. They are motivated so as to make
sure that initiation of their work is on a positive note and energy. HR also motivates good work
of existing employees so that they do not feel left out. In this way both old and new employees
are motivated so that they can bring best out of them and fulfil organisational objectives and
goals.
Evaluation- This stage includes evaluation of work of subordinates by their superiors. In
Carnival Corporation managers evaluate work of employees. After evaluation they also provide
feedbacks of their assessment. In feedbacks various measures to improve performances and bring
them to required standards is also provided. When all this work is carried out in an effective
manner relationship between superiors and sub-ordinates in an organisation improves and
strengthens.
Celebration- In this last stage of HR life cycle employees are rewarded and appreciated
for jobs done by them. They are provided extra benefits, incentives, bonuses, gifts and many
more perquisites(Wadhwani and Decker, 2017). Carnival Corporation follows this culture of
celebrating achievement of goals with employees. This increases the feeling of belongingness in
employees towards organisation. This helps in talent management of organisation.
Importance of life cycle of HR to overcome staff retention issue-
Proper use of HR Life cycle helps to solve issues of employees, improves their
performances through which they get motivated and work towards goals of organisation. This
helps in achievement of individual as well as organisational goals. Employees feel belongingness
with organisation and do not think of leaving it resulting in increase in employee retention.
P5 Development of a performance management plan for Carnival Corporation Plc.
Performance management plan is also called performance action plan. It is a flexible
toolkit used to improve employees performance. It can be applied on both strong as well as poor
performers. Carnival Corporation is having a major issue with working conditions. Their waiters
and waitresses are not satisfied with working conditions they are creating in their organisation.
Following is performance management plan for Carnival Corporation-

 Planning: Carnival Corporation develops a set of rules and standards so that they can
deliver high quality of services including quantity of food as well. This will help
employees to know actual goals and objectives of organisation (Helmus and et. al., 2017).
 Implementing: Carnival Corporation needs to be attentive while applying these plans.
Each employee needs to be aware of plan and ways of its implementation.
 Evaluating: Carnival Corporation needs to make sure that they monitor employees in
order to improve their performance and achieve advantage over their competitors. In this
way it help its employees to identify their potentials.
 Feedback: In Carnival Corporation it is chef's job to check feedbacks of customers and
make required changes in their services.
Task 3
P6 Identification of specific legislations which are to be followed by Carnival Corporation
Legislation is preparation of law by a body which makes law through its process of law
making. This process includes evaluation, amendment as well as votes on proposed law. The
words which are used in bill which communicate values, purpose of proposal and
judgement(Braun and Schreiber, 2017). when abiding by these laws company can gain
competitive advantage. Legislations which are required to be followed by Carnival Corporation
are as follows:
 Employment Act, 2002: Employment Act contain rules which are in relation to leave
regarding maternity, paternity, leave and pay etc. This act helps Carnival Corporation to
treat their employees fairly. It also helps in maintaining a healthy relationship between
employees and managers.
 Food Safety Act, 1990: This act mentions various quality standards to be met by
organisations serving food. Carnival Corporation looks after this act so as to serve good
quality food. This acts also helps them in promoting their product in an ethical manner. It
also helps in accomplishing pre-determined goals.
 National Minimum Wages Act, 1998: This act tells about minimum amount of wages
which are to be paid to a worker (Richards and Grinsted, 2020). Any organisation paying
less than it will be lawfully incorrect. Carnival Corporation apply it on their firm in order

to provide better living standards to their employees and motivating them through
increments in wages.
With the help of these above mentioned laws Carnival Corporation implies their business
operation and develop effective relationship with their employees and also helps in achieving
long term goals effectively.
P7 Illustrations showing how company, employment and contract law have impact on businesses
Regulations and legislations provide guidance to company in order to reach their goals
and objectives. Every legislation have some positive as well as negative impact on an
organisation. It is required by hospitality sector to be careful while they are applying
modification on their organisation that it does not impact functions and life cycle of company.
Below mentioned are example of companies who have faced problems due to violation of law:
 Wilko, a home décor company paid £2.4 million to a 35 year old employee who was
paralysed by a fall while working.
 Jaquar Land Rover was penalised when an employee in production line lost a leg while
car bump
 £2m was cost to Warburtons while mishandling a machine by an employee whose hand
was then caught in machine for around 25 minutes.
 £ 2m and £ 1.1m were charged from LSER and Wettons due to death of a cleaner(Utz
and Lee, 2017).
 KFC was also heavily charged when two of its employees faced heavy burn injuries.
The above mentioned examples shows huge losses which businesses might face while
ignoring rules and laws. It also majorly effects decision making process in an organisation. In a
hospitality industry a number of changes have been seen in regulations which have changed
objectives of companies and forced them to modify the decisions they took in past.
Reflect impact of legislation and ethical principle in decision making of Carnival
Corporation
It is essential for every organisation to follow rules and guidelines of legislation. This
helps an organisation to pursue their business ethically and in a disciplined manner. Still after
such care some incidents may take place. Carnival makes sure to provide full treatment to these
employees. This provides employee satisfaction and also enhances brand image.

TASK 4
P8 Relation of different functions and roles in hospitality sector.
Organisational structure of Hotel
Organisational Structure of Carnival Corporation Plc.
Organisational Structure of Theme park

Organisational Structure of Restaurants
Hospitality industry includes a number of different business like hotels, theme parks,
restaurants, tourist agencies etc. each of these operations contain different roles, functions and
structure, however each one is interlinked(Ilavarasan and Ei Chew, 2016). Some of these
relations are:
 Food production and food and beverages service: These are important functions in
hospitality sector. Food and beverages in Carnival Corporation cook food from the raw

materials provided by food production department. It is very important for these two
departments to work together in order to fulfil customer demands.
 House Keeping and front Office Department: Both of these are crucial part of
hospitality industry. Housekeeping concerns with cleanliness of rooms, wash rooms,
common area etc. Front office on the other hand is responsible for conveying message to
housekeeping regarding demands of customers (Havergal and Edmonstone, 2017). This
is why Carnival Corporation considers both these departments as important part of
organisation.
P9 Define various communication method, coordination and monitoring in the department
There are various communication methods which is adopted by Carnival corporation
which is going to be discussed below:
Conference: In this method, the top management conduct a meeting for communicating
with member in effective manner. Therefore, they make strategy for taking decision regarding
the activities and functioning of business firm.
Seminar: Seminars is organised in Carnival Corporation that helps in accelerating the
morale and satisfaction level of staff members. Also it encourage them to perform well within
workplace that helps in satisfy the need and requirement of customer.
Email: This method is adopted by company for delivering important information in the
business organisation. The most vital information is shared through mails in the company. The
supervisor of food and beverage department can use this communication method for transferring
necessary information in an effective manner.
Text Message: It is the informal way to deliver the information by supervisor of Carnival
Corporation. The higher authority can use this method to transfer vital information in informal
way. The food and beverage department deliver message through this communication channel
(Nelson, 2018).
Delegation: It is very essential method of monitoring and controlling its business
activities and function in appropriate manner. The top management delegate its work to
subordinate in an effective manner. The manager of food & beverage department can delegate
their work to its employees in appropriate way.
Policies and Procedures: The manager of F&B Department make effective strategies,
policies & procedures for handling the activities and functioning of Carnival Corporation.

According to this method, it motivate and encourage employees to work well as well as follow
policy and procedures.
Importance of this methods to strengthen value chain
As per this method, the supervisor of Carnival Corporation will build appropriate plan of
action for future period of time. The effective information helps in achieving goal and objective
within given time period. The deviation and error in communication process can be eliminated
that helps in company in boosting its productivity as well as profitability level(Bolin and et. al.,
2018). The manager of Carnival corporation encourage subordinates to increasing their
performance level. Along with this, the supervisor can give guidance to its staff member through
effective plan and strategies within business organisation.
CONCLUSION
On the basis of above discussion, it has been analysed that there are different factor that
imposes negative and positive impact on activities and functioning of hospitality industry. Every
company follow rules and regulations for monitoring and controlling the financial performance
in effective manner. And also they make appropriate trial balance and Journal entry in order to
perform financial transaction in better way. In addition to this, performance management plan
assists organisation to resolve issues,conflicts and grievances that arise within workplace. Beside
from this, HR Manager provide guidance to its employees that helps in increasing productivity
level as well as gain competitive benefits over rival firms. Apart form this, there are different
method of coordination, communication and monitoring for motivating as well satisfying staff
members of different sector.

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