The Hospitality Business Toolkit

The Hospitality
Business Toolkit

Introduction
In today's world, the Hospitality industry is unitary of the fastest growing business
enterprise in the current scenario. Hospitality is one of the work branches which is having the
longest life in the environment. The hospitality industry is a group of business which focus on
providing the services to the customer all over the world.(owie, Buttle and Mariussen, 2016)
Under this report, discussion will be in the context of smoke& salt, located at Brixton offering
the food and beverages for its target customer is planing to expand its business at the
international path-form by managing the financial requirements and evaluating the needs to
manlike assets life cycle in the operation location. further their will be discussion of the
consequence of lawful and right consideration on the business organization.
LO1
P1 Investigate the principles of the managing and monitoring financial performance.
The business transaction carried out between two parties engaged in business for mutual
benefit in the present as well as in the long run. Their are different business transaction such as
purchase of raw material, sales of product and services, paying the wages and salaries to the staff
and raising the finance for operating day to day activities and movement of the cash in the bank
account. With the reference of Smoke&salt, uses financial statements to measure the
performance of their business from time to time. Management team of smoke&salt use different
techniques to determine the company financial such as financial gain statement, equilibrium
sheet and statement of currency flow and financial ratio to measure the performance :
Income statement : According to Generally accepted accounting principles, company
has to records its revenues and expense in the income statements and the recording of sales and
expenses on the accrual basis. (Altinay, Paraskevas and Jang, 2015)
Balance sheet: In this statement, companies possession and liabilities and shareholder
assets are stated for the specific time period. Assets are to be equal to the sum of the companies
debts and its shareholders equity.
Statement of cash flow: This statements shows the cash inflows ans outflows concluded
a period of time. This supply profits margins of the company for specific period of time. This
statements reveals whether the company have a positive or negative cash flow in the company.

Financial ratios: This ratios provide a way to measure the performance of the company
over the period if time. The financial ratios are used to evaluate the company liquidity in the
company, profitability of the activities, financial leverage in the company.
Net profit margin: It is common used for measuring the profitability of the company.
Net profit is a amount left over after paying all the expense and overhead including interest and
taxes.
Operating profit margin: This ratio is used to measure the efficiency of the operations
in the company. This also helps in calculating the liquidity of the company. Liquidity is very
important for paying of bills.
Current ratio: This ratio helps in showing that how much of assets is required to pay off
its liabilities. In the other words, it show how much assets should company have to repay the
liabilities.( HButed, Felicen and Manzano 2014).
Return of investment(ROI): This ratio show how much company earn return in respect
of its investment. This show the effectivenesses of the investment and compare the efficiency of
a various investment and select the investment which have a high ROI.
P2 Apply the double entry book-keeping system of debits and credits to record sales and
purchase transaction in a general ledger.
In the double-entry method, transaction are taped in status of debits and credits in the
general ledger. It is fundamental concept that states that every transaction has equivalent and
alternate effects in at most two contrary accounts and the sum of all the debits must be equal to
the amount of all the credits. With the reference of Smoke&salt, the accountant has to make use
of bookkeeping to record the transaction. Book-keeping is a way of measure, recording and
communication a firms financial information. Their are various different business transaction
which can be categorized under the possession, liabilities, stake, income, cost and gain&losses. It
is a are essential for the double-entry system, debits mention to the left side of ledger and credit
refers to the right side of the account. The balance is having debits equal to credit. It is book-
keeping is a concept that all affects two accounts in the financial accounting. In the general
ledger , there is recording of the two side of each transaction. The double entry in the purchase,
sale account, any sale in the outlet lead to increase in revenue of the organisation. The double-
entry makes a balance sheet made up of asset, liabilities and equity. The balance sheet is