Financial Analysis Report: Hotel Performance and Accounting Analysis

This report presents a financial analysis of a hotel, addressing various aspects of its financial performance. The analysis begins with an examination of key metrics such as actual and budgeted room occupancy percentages, guest density, and average daily room rates. It then delves into the concept ...Read More

Running head: Accounting Analysis Financial Report
Accounting Analysis Financial Report
Name of the Student
Name of the University
Author Note

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Account Analysis Financial Report
Table of Contents
Question No 1............................................................................................................................2
Question No 2............................................................................................................................2
Question No 3............................................................................................................................3
Question No 4............................................................................................................................4
Question No 5............................................................................................................................5
A)............................................................................................................................................5
B)............................................................................................................................................6
C)............................................................................................................................................6
Reference....................................................................................................................................8

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Account Analysis Financial Report
Question No 1
As per the Actual Room Occupancy Percentage it show how much is able to get it
room occupied from the total room available. It shows the percentage of the room which is
been able to generate revenue for the company.
As per the Budgeted Room Occupancy Percentage it show how much the company
have budgeted the room space which will be taken in the upcoming month so this show how
the company is able to get the budgeted data over the total earning of the company.
Guest Density shows the average number of room occupied by the guest. It is been
calculated by dividing the Total Room Occupied/ Total Number of Guests. It helps the hotel
to know how much they can able to accommodate guest in each room.

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Account Analysis Financial Report
Actual Average Daily Room Rate help to know the average room rate by the taking
Actual room as base and by dividing the total revenue with budgeted room so this help to
know how much the company is able to earn from the budgeted room.
Question No 2
Profit Margin show about the profit which the company is able to earn by carrying the
business activities. It is the excess amount which the company is earning from the cost of
goods sold. The more profit margin the company earn, the more it is been consider
financially strong.
Profit Margin can be different for different company as each company have different
policy while preparing their income statement and also it have different costing method to use
while carrying the price in the company. Each company have different amount of expenses
and also there are different nature of expenses so this can be a reason why the company is
having different profit margin. It can also company have different pricing strategies so as
each have different individual pricing strategies so it will also affect the company profit
margin so as each company have different pricing policy so the margin will also be different.
Question No 3
Accounting Entity – It is the entity transaction that the owner and the business are two
separate entity and the accountant have to record the same as per the entity concept so that it
can able to classify the difference in the accounting transaction (Chambers 2014). As per the
hotel is been concern if the owner take any room for its personal use than the hotel have to

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Account Analysis Financial Report
record upon the name of the owner as drawing and should account the same in the accounting
transaction of the company (Daccache et al.,2015)
Going Concern Concept – As per this concept is been concern it show that the company will
able to run for a longer period and it is not able to have a shutdown of the business in the
coming years (Galbraith 2017). As per the hotel is been concern it can be seen from the
business if the company is able to earn proper amount of revenue from the guests than it can
be said the hotel is able to have a proper financial position which will help the user to know
that the company is able to have going concern concept, if the company is not having going
concern concept than it have to disclose the same in the annual report of the company
(Henderson et al., 2015).
Matching Concept – As per the matching concept is been concern it show that each entry
have a dual aspects so if the company have debited a transaction so it will also have an credit
entry for the same (Hoyle, Schaefer & Doupnik 2015). It shows that each events have dual
aspects and the company should follow the same while carrying the accounting in the
business activities. So if the hotel have earn revenue than it will affect two side of the
company accounts as it have an increase in the sales as well as it will increase the bank/ cash
of the company.
Accrual Accounting Concept – It state that the company should only able to record the
revenue in the books only when they have received the cash from the customer (McDonnell
& Milton 2014). It may happen that the company is able to sale a sum of $10000 to an
customer but didn’t received the cash, so it cannot able to record the same as revenue as it
didn’t able to receive the cash, so it should record the same when only it able to receive the
cash from the customer. As per the hotel is been concern it may happen that one customer
have booked an room in advance so it should not record the same as revenue only when it

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should record when it able to get the amount of money in regards of the room (McSherry &
Wilson 2015).
Consistency – As per this principle is been consider it state that the company should able to
follow one accounting principle for many years as it should not change the accounting
principle on a regular basis. It should be consistent with one accounting principle (Mitchell et
al., 2015). As per the hotel industry is been concern it can be said if the company is using one
method for calculating the room rate so it should follow the same and should not change the
same as if the company changes it on a regular basic than it will make the accounting more
complex and the financial user will not able to make proper decision in regards of financial
statement of the company.
Question No 4

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Question No 5
A)
A) Building Owner Ac Dr 1000
To Rental Commission Ac 1000
B) Expenses Ac Dr 720
To Supplies Ac 720
C) Interest Ac Dr 160
To Accrued Interest Ac 160
D) Outstanding Wages Ac Dr 520
To Wages Ac 520
E) Interest Earned Ac Dr 560

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Account Analysis Financial Report
To Accrued Interest Ac 560
F) Interest Ac Dr 2040
To Accrued Interest 2040
G) Dividend Ac Dr 5600
To Accrued Dividend 5600
B)
As per the adjustment entry is been concern it affect both the income statement and
the balance sheet of the company as it have a dual aspects so if one entry affect the income
than the other will directly affect the balance sheet of the company. As the interest is been
accrued so it will go in the income statement as interest expenses and it will also come in
balance sheet of company.
C)
As per the adjustment entries is been concern it does not affect the cash account of
the company as if the adjustment are done in regards of the due entry and also about the
accrued entry in the financial statement of the company. As it take into consideration the non-
cash item so due to these it does not able to affect the cash account of company. As if there is
some adjustment in regards of the depreciation so it will be there as the entry will be
Depreciation Ac Dr
To Accrued Depreciation

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Account Analysis Financial Report
Reference
Chambers, R. L. (Ed.). (2014). An accounting thesaurus: 500 years of accounting. Elsevier.
Daccache, A., Knox, J. W., Weatherhead, E. K., Daneshkhah, A., & Hess, T. M. (2015).
Implementing precision irrigation in a humid climate–Recent experiences and on-
going challenges. Agricultural water management, 147, 135-143.
Galbraith, J. (2017). American capitalism: The concept of countervailing power. Routledge.
Henderson, S., Peirson, G., Herbohn, K., & Howieson, B. (2015). Issues in financial
accounting. Pearson Higher Education AU.
Hoyle, J. B., Schaefer, T., & Doupnik, T. (2015). Advanced accounting. McGraw Hill.
McDonnell, A., & Milton, D. (2014). Going with the flow: reconsidering ‘repetitive
behaviour’through the concept of ‘flow states’.
McSherry, B., & Wilson, K. (2015). The concept of capacity in Australian mental health law
reform: Going in the wrong direction?. International journal of law and
psychiatry, 40, 60-69.
Mitchell, R. K., Van Buren III, H. J., Greenwood, M., & Freeman, R. E. (2015). Stakeholder
inclusion and accounting for stakeholders. Journal of Management Studies, 52(7),
851-877.

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