Budget Analysis, Financial Performance Appraisal: Hotel Finance

This assignment provides a comprehensive analysis of a business hotel's budget and financial performance. It includes tasks such as identifying the scope of the budget, analyzing its effects on various divisions (Hospitality, Marketing, Finance, and Human Resources), and determining necessary budget changes. The analysis covers internal and external factors impacting the budget, along with email communications detailing findings and recommendations. Practical tasks involve creating and analyzing budgets for 2019 and 2020 using Excel, summarizing financial outcomes, and reporting responsibilities across departments. A yearly fiscal performance appraisal form is completed, identifying deviations from the budget, reasons for these deviations, and ways to overcome deficiencies. The assignment concludes with an internal memo summarizing the financial performance, shareholder loss, and loan terms, providing a thorough overview of the hotel's financial health and management.

Unit skill Assessment

Part 1
TASK 1
The scope of the budget
• To identify costs
• To determine inefficiencies
• To gain financial control
• To increase saving
• To increase efficiency
The effects on the several divisions of the hotel:
Hospitality:
Budget offers the operations department an idea about how to manage hospitality requirements.
• Managing the kitchen
• Extra equipment and tools
• Increasing room
• Increasing the revenue by 50%
Marketing:
The budget provides the marketing department the estimation of costs needed for marketing.
• The cost of the hotel management software
• Increased cost for marketing equipment
• The increased cost of marketing campaigns.
Finance:
This statement gives the concerned unit with relevant and precise data about monetary health of
the firm.
• Short term loan from ANZ bank
•4% interest payment
•Investor return policy of $200000
Human resource:

Financial plan delivers the human resources unit a deep understanding about how many staff
members they can afford to hire.
• Hiring extra staff
• Staff wages, superannuation and insurance
• Training
• facilities.
b) Following budgeted expense will need to change:
• Staffing
• Room Cleaning
• Room Furnishing
• Building Maintenance
• Utilities
• Electricity cost
c) The internal factors which can impact the budget:
• Hiring new staff can increase the staffing costs.
• The increased cost of marketing campaigns.
• The increased rent for the building
• The hotel maintenance.
d) E-mail: To: [e-mail]
From: [e-mail] (Write down your e-mail address)
Dear Barry,
Hey! I wish you are performing good. I am notifying you in details regarding my findings on our
new budget.
The aim and objective of such report:
• Calculate and recognise the possible income and needed expenditures which will be
experienced in 2019 and 2020.
• The budget permits the entity to operate in a planned means and accomplish their goals and to
make more profit.
• The NBH’s goal to increase room numbers by 50.
• The NBH’s goal to expand the hotel’s revenue by 50%.

• To be transparent to all stakeholders regarding the present and future financial situation of the
business. The scope of the budget:
• To identify costs
• To determine inefficiencies
• To gain financial control
• To increase saving
• To increase efficiency
Following budgeted expense will need to change:
• Staffing
• Room Cleaning
• Room Furnishing
• Building Maintenance
• Utilities
•Electricity expenses
The external factors which can impact the budget:
• Political: Any change in government policies,
• Economic: Any change in global economy.
• Social: Change in customer needs.
• Technological: Introduction of new online technology.
• Legal: Any changes in laws and regulations.
• Environmental: Any natural disaster or pandemic.
Hope this will assist you further.
If you have any queries, then please don’t hesitate to ask me.
Thank you.
With regards.
Yours sincerely (Write down your name)
PART 2
Task 1
A
a) Find the excel file for 2019 budget for part2
b) Find the excel file for 2020 budget for part 2

B
Summary:
2019:
Total Income: $8810750
Total Expenditure: $80,42500
Total Profit/Loss: $768250
2020:
Total Income: $1,16,35,250
Total Expenditure: $3037500
Total Profit: $4910000
Net Profit: $36,87,750
c) E-mail:
To: [e-mail]
From: [e-mail] (Write down your e-mail address)
Dear Barry,
Hi greetings from this side! Hoping that everything is going good at your end. I wrote this
email to provide details regarding the estimates about income and expenses. Kindly go
through the attached documents and statements related to the budgets relevant to financial
year 2019 and 2020.
Budget conclusion:
2019:
Over-all Revenue - $..: $8810750
Aggregate Outlay - $.80,42500
Estimated Profit/Loss - $768250
2020:
Total Income - $1,16,35,250

Total Expenditure - $3037500
Total Profit - $4910000-$2,000,000
Net Profit - $2910000
Explanation:
The growth purposes are not possible due to the deficit in the 2019 budget of $187,250.
Though, it is rectified on its own in 2020, the underperformance has necessity to be looked
upon for the 2019 budget due to the insufficiency of cash to support the growth objective of
the organisation. Kindly provide details and your point of view on this matter. Thanking you.
With concerns.
Yours thankfully
(xyz)
PART 3
Task 1:
a) Find the excel file for 2019 budget for part 3
b) Find the excel file for 2020 budget for part 3
c) Report:
To all staff:
Final budget summary:
2019:
Total Income: $8910750
Total Expenditure: $3132500
Total Profit: $868250
2020:
Total Income: $11635250
Total Expenditure: $3037500
Total Profit: $36,87,750
Net Profit: $3487750
Reporting responsibilities:
Hospitality: Increasing rooms by 50, 10 refurnished rooms

Human resource;
Finance: loan of $100000, with interest rate of 4%, investor return of 200000
Marketing: increased marketing expenses
All departments: Total operating cost of 7947500
PART 4
Task 1
YEARLY FINAL FISCAL PERFORMANCE APPRAISAL FORM
Name of Critic: Your name
Time: 25.12.2019
Appraisal year: 2019
Provide the details regarding the income for the year in review? Also give brief details and
explanation
The year 2019 reported a loss of ($1,35,500).
Identify the abnormal action that took place which created the difference in outcome from the
previous in the reviewed annum.
Was there any exceptional financial activity which has caused the year in review’s financial
performance to be different from previous years?
In 2019 the NBH had a major expansion and acquired 50 new hotel rooms. As a result, there
was a lot of unexpected financial activity.
State the variation higher than 5% in the year of review from the estimated budget?
In human resources the staffing is done by 4 extra staffing which has caused the budget to
misbalance.
Does the year for which reviewing is being made meets the investor rate of return expectation of
$2000000? In case not, provide the justification for the situation.
No, the NBH hotel is running in loss hence not be able to provide return requirement.
Due to the hotel’s expansion the hotel’s shareholders have agreed to leave their returns for this
expansion to take place.
Signature of Reviewer: Your name

b) E-mail:
To
The Manager Finance department NBH
Hi Barry, hope you are doing well. Do verify the documents provided for the actual budget for
the year 2019 and the completed review form.
Reasons for deviations:
• Increased staff cost
• Increased building maintenance cost
• Increased utility cost.
•Increased marketing expenses
Ways to overcome the deficiencies:
• Doing intense market research
• Analyse internal and external factors
• Implementing enterprise resource system
•Better cash management
•Cost effective techniques usage
Please check everything and provide your valuable feedback.
With regards.
Thanking you.
Yours sincerely
Your name
(c)

INTERNAL MEMO
Nara Business Hotel – Internal Memo
Name: Your name
Date: 31/12/2019
Department: Finance
Memo subject: Budget information
Deviation resulted due to:
 Increased staff cost
 Increased building maintenance cost
 Increased utility cost
 Increased marketing expenses
Profit or loss incurred in 2019:
Loss incurred in 135500
Shareholder’s loss:
The shareholders did not receive their returns due to the investment in the hotel
expansion.
Cash carrying foreword from 2019 to 2020:
This amount of (-) $953500 will be carried forward as negative amount from
2019 to 2020.
Loan term and amount:
Time: 1 year
Interest: 4000
The amount: 100,000