Trusted by +2 million users,
assist thousands of students everyday
Showing pages 1 to 4 of 16 pages
FINANCE AND FUNDING
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................31.2................................................................................................................................................41.3................................................................................................................................................6TASK 2 Covered in ppt...................................................................................................................72.1 In travel business managment accounting system is useful in decision making..................72.2................................................................................................................................................8TASK 3 In travel business proper interpretation of financial statement is essential:......................83.1 Interpretation of two year balance sheet..............................................................................8TASK 4 Covered in poster.............................................................................................................114.1 Fund identify for business sector is useful in determing the source of finance..................11CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................13
INTRODUCTIONHospitality industry is regarded as fastest and growing industry as its role has increaseswith the increasing competition. This service industry has bifurcated into different segmentsamong which this travel and tourism is one of the integral part of this entity. Finance is thatmedicine for an enterprise which will heal the wounds of an entity which due to the attacks ofcompetitors and external market changes. Merlin entertainment has been selected for this projectin order to define the roles and responsibilities of an entity to meet the financial requirementsimposed on a business. This project report is all about describing the various sources of financesselected by an entity in order to expand their services to enter into new segment to lure widenumber of customers. It also defines various factors utilised by management and consideration ofseveral elements in determination of the price by choosing cost beneficial pricing methods.TASK 11.1 significance of cvp in decision making decisionThe travel and tourism industry is the fast growing industry in the business world. Everybusiness of any sector have a common objective that is profit maximization, So every businessneeds to control their expenses or reduce their expenses with the view to increase the sales andrevenue (Law, 2015). In the business there are different expenses such as operating expenses,accounting expenses, rent and wages fixed cost which have no impact on profit,they remain fixedirrespective of number of output to be produce.The variable costs such as raw material, energy usage, labour, distribution costs etc. isuseful in determining the cost of products. The variable cost changes with reference to numberof output to be produce.In the Merlin Entertainment if the prices will continuously increasethan the customers will not more attract on that organization. The costs should be varies andchanged periodically to attract more numbers of customers, in opposite of this if prices increasethan the customers will demotivate and then the sales and revenue will decrease which isunfavourable for the Merlin firm.To reduce the cost and increase the profit is some technique of CVP analysis. Here theMerlin Entertainment firm using the Cost Profit Volume (CVP) technique to reduce cost andincrease profit. The CVP analysis is a planning process that management uses to predict thefuture volume of activity, costs incurred, sale made, and profits received. CVP analysis is used to
determine how changes in costs and volume affect a company's operating income and net income(Robbert and Roth, 2014). Total fixed cost, total variable cost are some proposition of break evenanalysis.Importance of CVP technique in fast growing industry travel and tourism sector's entityMerlin Entertainment :Sales revenue less variable cost will reveal contribution help in determining the CVPanalysis. Balance amount is deducted from fixed cost that will gives the profit.1The total cost, revenue, variable cost are closely interrelated which have strong influence onCVP analysis. The CVP relationship becomes important for budgeting and profit planningbecause it has a cause and effect relationship.To maximize the profit is one of the sole criteria of every business. In profit planningtheCVP analysis helps to determine the maximum sales volume which is essential to avoid losses,and the sale volume at which the profit goal of the Merlin will be maximise. (Olbrich and Jansen,2014). As an ultimate objective it helps management to find the most profitable combination ofcosts and volume. It helps to provide various sales mix which facilitates variety of customers touse wide variety of products or services to achieve maximum profit.The analysis helps the management in the decision making process to increaseprofitability, helps in price determination of the products and services also as well as it helps tocontrol the cost. With help of this analysis the management can evaluate the effect of costvolume profit changes, in order to achieve expected profit.·It helps in determine the levels of sales to be achieved to meet their targeted profit. Themanagers will prepare the budgets consists of the costs and the expected revenues at any level ofproduction with help of the analysis. So, it helps in preparation of budgets.1.2Pricing methods used in the travel and tourism sector :Every enterprise should decide the price which is quite useful for carrying out thebusiness activity. Sole consideration is made not on deciding the price of product but also onResearch and development and risk taking ability are some factors taken for deciding the price.1
desklib-logo
You’re reading a preview
Preview Documents

To View Complete Document

Become a Desklib Library Member.
Subscribe to our plans

Download This Document