Cash budget of Cardiff Central Hotel for 2020

Cash budget refers to budget prepared by the business for evaluating the cash inflows and outflows from the company. Cash budget is prepared by the company for evaluating the availability of cash with the company for carrying out the operations of business.

HOSPITALITY INDUSTRY

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
TASK 1............................................................................................................................................1
Cash budget of Cardiff Central Hotel for 2020..........................................................................1
TASK 2............................................................................................................................................5
Budgeted Profit or loss statement for Jan to June 2020...............................................................5

TASK 1
Cash budget of Cardiff Central Hotel for 2020.
Jan Feb March April May June
£ £ £ £ £ £
Receipts :
Collection - Room
Sales
1,22,625 1,26,925 1,34,750 1,43,575 1,47,125 1,67,500
F & Bev. 44,500 40,100 43,300 42,600 40,200 36,500
Rent 950 950 950 950 950 950
Commission 25 55 20 15 10 40
Total Receipts 1,68,100 1,68,030 1,79,020 1,87,140 1,88,285 2,04,990
Payments :
Laundry 6,250 6,250 6,250 6,250 6,250
Printing &stationary 2,000 2,000 2,000 2,000 2,900 2,000
Toiletries 46,000
Salaries 1,10,000
Wages 11,667 11,667 11,667 11,667 11,667 11,667
Marketing cost 60,000
Payment to suppliers 0 2,000 12,300 2,000 16,400 2,000
Van 28,000
Petrol & diesel 1,000 1,000 1,000 1,000 1,000 1,000
Restaurant
Improvements
8,800 22,000
General Maintenance 5,000 5,000 5,000 5,000 5,000 5,000
Lighting & heating 27,500 27,500
Rates 21,668 5,417 5,417
Total payments 19,667 73,917 1,02,517 49,584 48,634 2,52,834
Balance b / f 2,65,000 4,13,433 5,07,547 5,84,050 7,21,606 8,61,257
Net cash flow in
month
1,48,433 94,113 76,503 1,37,556 1,39,651 -47,844
1

Balance c / f 4,13,433 5,07,547 5,84,050 7,21,606 8,61,257 8,13,413
Jul Aug Sept Oct Nov Dec
£ £ £ £ £ £
Receipts :
Collection -
Room Sales
2,18,560 2,44,040 2,19,415 1,94,830 1,48,155 1,16,055
F & Bev. 45,300 44,800 37,700 28,900 38,000 51,000
Rent 950 950 950 950 950 950
Commission 25 35 30 45 50 35
Total Receipts 2,64,835 2,89,825 2,58,095 2,24,725 1,87,155 1,68,040
Payments :
Laundry 6,250 6,250 6,250 6,250 6,250 6,250
Printing &
stationary
2,000 2,000 2,000 2,000 2,900 2,000
Toiletries
Salaries 1,10,000
Wages 11,667 11,667 11,667 11,667 11,667 11,667
Marketing
cost
Payment to
suppliers
2,750 2,000 2,000 3,500 2,000 2,000
Van
Petrol and
diesel
1,000 1,000 1,000 1,000 1,000 1,000
2

Restaurant
Improvements
13,200
General
Maintenance
5,000 5,000 5,000 5,000 5,000 5,000
Lighting &
heating
27,500 27,500
Rates 5,417 5,417 5,417 5,417 5,417 5,417
Total
payments
34,084 46,534 60,834 34,834 34,234 1,70,834
Balance b / f 8,07,163 10,37,915 12,81,206 14,78,467 16,68,359 18,21,280
Net cashflow
in month
2,30,751 2,43,291 1,97,261 1,89,891 1,52,921 -2,794
Balance c / f 10,37,915 12,81,206 14,78,467 16,68,359 18,21,280 18,18,486
Working Notes
Calculation for cash collection
Jan Feb March April May Jun
Room sales 1,30,500 1,25,000 1,40,000 1,45,500 1,48,000 1,78,000
Food & beverage 44,500 40,100 43,300 42,600 40,200 36,500
Rent 950 950 950 950 950 950
Commission 25 55 20 15 10 40
Room Sales
Business concerns 37800 45675 43750 49000 50925 51800
3

35%
Individuals 84825 81250 91000 94575 96200 115700
Collection from
sales
122625 126925 134750 143575 147125 167500
Jul Aug Sept Oct Nov Dec
Room sales 2,40,400 2,46,000 2,05,100 1,89,300 1,26,000 1,10,700
Food & beverage 45,300 44,800 37,700 28,900 38,000 51,000
Rent 950 950 950 950 950 950
Commission 25 35 30 45 50 35
Room Sales
Business concerns
35%
62300 84140 86100 71785 66255 44100
Individuals 156260 159900 133315 123045 81900 71955
Collection from
sales
218560 244040 219415 194830 148155 116055
Calculation for payments to suppliers
Payment to
Suppliers
Jan Feb March April May Jun
In room beverages 2000 2000 2000 2000 2000
Bedding bundles 700
Kettle trays
Complimentary
items
9600 14400
Total 0 2000 12300 2000 16400 2000
Payment to
Suppliers
Jul Aug Sept Oct Nov Dec
4

In room
beverages
2000 2000 2000 2000 2000 2000
Bedding bundles 750
Kettle trays 1500
Complimentary
items
Total 2750 2000 2000 3500 2000 2000
Analysis
Cash budget refers to budget prepared by the business for evaluating the cash inflows and
outflows from the company. Cash budget is prepared by the company for evaluating the
availability of cash with the company for carrying out the operations of business. It could be
evaluated from the above that company is adequate cash flows throughout the budgeted period.
Company is not required to borrow funds from the external resources for meeting the business
operations. Hotel will achieve the desired targets and success from the cash flows. It is also
required to take effective control over the operations of business to ensure that the cash cycle of
the company is running smoothly throughout the year.
TASK 2
Budgeted Profit or loss statement for Jan to June 2020
Jan Feb Mar Apr May Jun
Room sales 1,30,500 1,25,000 1,40,000 1,45,500 1,48,000 1,78,000
F & B sales 44,500 40,100 43,300 42,600 40,200 36,500
Total sales revenues 1,75,000 1,65,100 1,83,300 1,88,100 1,88,200 2,14,500
Rental Income 950 950 950 950 950 950
Commission Income 25 55 20 15 10 40
Total Revenues 1,75,975 1,66,105 1,84,270 1,89,065 1,89,160 2,15,490
Expenses
In room beverages 2000 2000 2000 2000 2000 2000
Bedding bundles 700
Complimentary items 2000 2000 2000 2000 2000 2000
5

Laundry 0 6,250 6,250 6,250 6,250 6,250
Printing and stationary 2,000 2,000 2,000 2,000 2,900 2,000
Toiletries 3,833 3,833 3,833 3,833 3,833 3,833
Salaries 18,333 18,333 18,333 18,333 18,333 18,333
Wages 11,667 11,667 11,667 11,667 11,667 11,667
Marketing cost 5000 5000 5000 5000 5000 5000
Petrol and diesel 1,000 1,000 1,000 1,000 1,000 1,000
General Maintenance 5,000 5,000 5,000 5,000 5,000 5,000
Lighting & heating 9166.7 9166.7 9166.7 9166.7 9166.7 9166.7
Rates 5416.7 5416.7 5416.7 5416.7 5416.7 5416.7
Depreciation van 416.7 416.7 416.7 416.7
Depreciation minibus 333.3 333.3 333.3 333.3 333.3 333.3
Total Expenses 65750 72000 73116.67 72416.67 73316.67 72416.67
Profit 1,10,225 94,105 1,11,153 1,16,648 1,15,843 1,43,073
Analysis
Profit budgets are prepared for analysing the profitability that company will be having
adequate returns on running the business. The budget is an essential part of the planning process
that enables the management to prepare policies and strategies for achieving the budgeted profit
figures within specified time. The operations and activities of the company are arranged in
manner so that the desired profit levels could be achieved by the firm. It provides the company
with structured direction to follow for achieving the targets. The above profit budget of the
company shows that there will be adequate profits during the budget period. Company will be
effectively managing the costs and expenses for getting the required profits. Management has to
monitor the activities and processes of the business for achieving the target objectives and
ensuring that company earns the target profits effectively.
6