Financial Management in Hotel and Tourism Industry

International hotel management

TABLE OF CONTENT
• INTRODUCTION
• Calculating and analysing financial ratios
• Discussing why an understanding of ratios and their fluctuations is essential
for Hotel management
• Benefits and limitations of ratio analysis in decision making within hotel and
tourism industry
• CONCLUSION
• REFERENCES

Introduction
Financial management is a procedure of managing the financial performance
and position of an organisation (Ahrendsen and Katchova, 2012). This
procedure is the combination of various activities including procuring and
utilization of funds, recording and transacting financial records and many more.
The main aim of this report is to build an understanding about the financial
management in hotel and tourism industry. For this purpose, the organisation
which has been given is operating in hotel industry and named as Gatsby
Grange. This organisation is a small chain of Boutique within the region of
United Kingdom and Northern Ireland.

Calculating and analysing financial ratios
Ratio analysis is a financial technique to identify the true financial performance
and position of a business organisation (Mathuva, 2015). These ratios are
calculated using the financial statements of a company which are income
statement, balance sheet and cash flow statement. In the present case of Gatsby
Grange, the ration analysis has been conducted for three ratio families which are
profitability, liquidity and gearing.