logo

FINANCE IN THE HOSPITALITY TABLE OF CONTENTS INTRODUCTION 1

   

Added on  2020-01-23

19 Pages6609 Words225 Views
FINANCE IN THEHOSPITALITY

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Sources of finance............................................................................................................11.2 New methods of generating incomes...............................................................................2TASK 2............................................................................................................................................32.1 Elements of cost and ways in which gross profit percentage can be increased by changingsales price...............................................................................................................................32.2 Stock and cash control as well as security of cash on the premises and business hours..4TASK 3............................................................................................................................................43.1 Source and structure of trial balance................................................................................43.2 Evaluation of business accounts.......................................................................................53.3 Purpose of financial budget and process that can be used for budget control..................63.4 Variance analysis and justification of reason...................................................................7TASK 4............................................................................................................................................8AC 4.1 Calculation of ratios to determine business performance..........................................8AC 4.2 Recommendation for improve financial management strategies...............................9TASK 5..........................................................................................................................................10AC 5.1 Type of costs............................................................................................................10AC 5.2 Calculation of contribution per customer and cost volume profit relationship.......11AC 5.3 Recommendation for short term management decisions.........................................12(1) Breakeven point..............................................................................................................12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14

INTRODUCTIONFinance plays an important role in growth of an organization. In the report, sources offinance are discussed in detail and along with this methods of generating income are alsodescribed in detail. Apart from this, elements of cost and cash control as well as stock controlmethods are also described. After that, importance of balance sheet and income statement isdescribed in detail and along with this; budget and purpose behind its preparation are discussedbriefly. At the end of the report, ratio analysis is done and it results are interpreted in the propermanner. After that, cost volume relationship technique is applied and short term managementdecision is taken in the report.TASK 11.1 Sources of financeSources of finance that are available to City Brasserie hotel are as follows.Loan from bank- It is commonly used source of finance that are available to business.Under this, firm takes a loan at specific interest rates from the financial institutions. Inreturn the company needs to mortgage its property as a security to the bank. Loan can betaken at the fixed or floating interest rates. If loan is taken at the floating rate then it isvery risky for the firm. With the change in interest rate structure loan rate also changes(Irwin and Scott, 2010). If this change happens in the negative direction then cost of thefirm may increase. Hence, City Brasserie must takes loan at the fixed interest rate.Retained earnings- City Brasserie can also use retained earnings in order to finance itsoperations. It is a part of the profit that remains after deducting all expenses from therevenue. By making use of retained earning firm can finance its business developmentactivities without paying any cost.Private investors- It is a different mode of finance and under this private investors makesan investment in the firm and in return they get return from the firm on which they madean investment (Brown, Bird and Schalatek, 2010). Private equity are covered under thissection in which there is a private equity firm which makes an investment in the any firmand get shareholding in same. Till life time of investment private equity firm gets a sharein the invested amount. Hence, this source of finance is also suitable for the CityBrasserie hotel.1

Trade credit- In this, source of finance business firms takes a loan from the businessfriends with whom they are working. This is common with suppliers in which businessfirms purchase raw material at a credit. Thus, the firm can use this source of finance inorder to finance its purchase related operations.Loan from friends and relatives- This is most preferred source of finance because in caseof this source of finance there is no cost of raising finance. This is easily available sourceof finance but small amount can be raised from the friends and relatives which is also amajor limitation of this source of finance. 1.2 New methods of generating incomesNew methods through which City Brasserie hotel can generate revenue are as follows.Cookery classes- Currently, hospitality industry is growing at a rapid rate and more andmore people are going in hotel management course. This indicates that people are moreinterested in developing their cooking skills. Hence, if I will commence cookery classesand parsons that wants to learn cooking will join class. As a result, this will be a newsegment from which I will earn revenue. Jamie Oliver is running such kind of classes andthrough these classes it is earning good amount of revenue. Hence, this business segmentrequires due attention from the management side. Hence, if City Brasserie hotel isproviding a course and internship in food making then this makes help in increasing itsrevenue at the rapid pace (Brown and Petersen, 2011). Moreover, this may become corebusiness segment for the City Brasserie hotel in future time period.Merchandising of cookbooks and kitchen items- Cookbook’s can be the method foraccelerating income level of the firm. In cookbook’s images of all food items is givenalong with their price. Through cookbook’s consumer comes to know about the productand its appearance. Appearance of the product attracts people to purchase the product. Inresearch it has been found that mostly people in restaurant when comes to eat new fooditem are attracted by the color appearance of the product. Hence it can be said thatmerchandising of cookbooks will help in increasing revenue of the firm (Sarasan andet.al, 2011). In same way, if kitchen items are merchandise in systemic way then it willput good impression on consumers and will help in increasing company’s profit. In orderto create customers for this product cook books will be sold to those who will visit the2

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Assignment on Finance in Hospitality Sector
|26
|7579
|138

Financial Decision of ABC Ltd | Assignment
|14
|4368
|129

Financial Management Strategies : Report
|17
|5303
|159

Managing Financial Resource Decisions
|18
|4200
|127

Types of Financial Sources : Assignment
|17
|3535
|42

Hospitality Management Project Report: Sources of Funding, Sales Generating Methods, Financial Evaluation and Budgeting Analysis
|19
|4601
|182