Operational Finance: Executive Summary Report for e-Hotel

This report provides a comprehensive analysis of the operational finance of an e-hotel, Park Grand London Paddington, focusing on its financial performance over a six-month period. The report includes a cash flow statement, income statement, and balance sheet, offering insights into the hotel's liqui...Read More

Operational Finance For
Hospitality and Tourism

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Finance is the process for raising funds for the business which helps it for running its
activities which gives higher profitability (Filimonau and Delysia, 2019). The company's has use
for financial statements for managing its activity. The company which uses financial statements
it gives information about business transactions. Financial statements includes cash flow
statements, balance sheet, income statements etc. These financial statements helps company's for
managing its activities for higher profitability. This report is about e-hotel named Park Grand
London Paddington which provides its services online. This report includes topics which are
financial statements for the business.
MAIN BODY
Cash flow Statement
Category
For six
months
Cash on Hand 580500
Cash Receipts
Cash Sales 2000000
Collections from credit
accounts
Cash from Loans or
other outside sources 50000
TOTAL CASH
RECEIPTS 2050000
Total cash available 2630500
Cash Paid Out
Purchases
Gross Wages 120000
Outside Services 70000

Supplies 40000
Repairs & Maintenance 46000
Advertising 20000
Car, Delivery, Travel 100000
Accounting Services 50000
Legal Services 10000
Rent 50000
Telephone 5000
Utilities 70000
Insurance 5000
Taxes (real estate, etc.) 3000
Income Taxes Paid 15000
Interest 100000
Other Expenses
SUBTOTAL 704000
Loan Principal
Payment 500000
Capital Purchase
Other Start Up Costs 150000
Reserve and/or escrow
Other Withdrawals 200000
Total Cash Paid Out 850000
Cash Position 1076500
Interpretation- The Cash Flow Statement of Park Grand London Paddington displays
the liquidity position of the company (Franco and et.al., 2020). The Total Cash Available with
the hotel is 2630500. The Total Cash Paid Out is 850000. Thus the total actual Cash Position is
1076500. This displays that the actual liquidity position of the company is quite good and the
overall level of liquidity has been maintained in a proper way within the hotel.

Income statement
Particulars
For six
months
( projected )
Sales 2 0 0 0 0 0 0
Cost of Goods Sold 8 9 6 5 0 0
GROSS PROFIT 1 1 0 3 5 0 0
Operating Expenses
Salary (Office &
Overhead) 1 2 0 0 0 0
Payroll (taxes, etc.) 5 0 0 0 0
Outside Services 7 0 0 0 0
Supplies 4 0 0 0 0
Repairs & Maintenance 4 6 0 0 0
Advertising 2 0 0 0 0
Car, Delivery, Travel 1 0 0 0 0 0
Accounting Expenses 5 0 0 0 0
Legal Expenses 1 0 0 0 0
Rent 5 0 0 0 0
Telephone 5 0 0 0
Utilities 7 0 0 0 0
Insurance 5 0 0 0
Taxes (real estate, etc.) 3 0 0 0
Interest 1 5 0 0 0
Depreciation 1 2 0 0 0
Other Expenses: 1 0 0 0 0 0
Miscellaneous 8 0 0 0
(other 2) 2 0 0 0

(other 3) 3 0 0 0
TOTAL OPERATING
EXPENSES 7 7 9 0 0 0
NET PROFIT/LOSS
BEFORE TAXES 3 2 4 5 0 0
Income Taxes 6 4 9 0 0
NET PROFIT/LOSS
AFTER TAX 2 5 9 6 0 0
Owner draw or
dividends 1 2 9 8 0
RETAINED
EARNINGS 2 4 6 6 2 0
Interpretation- As per the Income Statement of Park Grand London Paddington, it can
be interpreted that the Gross Profit is 1103500. The Total Operating Expenses is 779000. The
Net Profit is 259600. The Retained Earnings is 246620. Thus it can be said that the Hotel is in
profits and it has been able to maintain its earnings as well as expenditures in the right manner.
Overall the hotel will is in profit and can ensure that it is able to maintain its income level in the
future also. Further it can be interpreted from the statement that the profitability level of the hotel
can be maintained in the future also due to higher-level of income which it has (Hua, 2016).
Balance sheet
ASSETS
For six
months
Current Assets
Cash in Bank 580500
Accounts Receivable 50000
Inventory 30000
Prepaid Expenses 10000

Deposits 8000
Other current assets 30000
TOTAL CURRENT
ASSETS 708500
FIXED ASSETS
Machinery &
Equipment
200000*10% 200000
LESS: Accumulated
Depreciation -
Machinery &
Equipment 180000
100000*15% 100000
LESS: Accumulated
Depreciation -
Furniture & Fixtures 85000
Leaseholder
Improvements
100000*15% 100000
LESS: Accumulated
Depreciation -
Leaseholder
Improvements 85000
Land & Buildings 200000
LESS: Accumulated
Depreciation - Land &
Buildings 180000
Other Fixed Assets 100000
LESS: Accumulated
Depreciation - Other
85000

Fixed Assets
TOTAL FIXED
ASSETS (net of
depreciation) 615000
OTHER ASSETS
Intangibles 50000
Other 16120
TOTAL OTHER
ASSETS
TOTAL ASSETS 1389620
LIABILITIES &
EQUITIES
Current Liabilities
Accounts Payable 70000
Interest Payable
Taxes Payable 3000
Short Term Notes (due
in 1 year)
Current Part, Long
Term Debt 20000
TOTAL CURRENT
LIABILITIES 93000
Long Term Debt
Bank Loans Payable 500000
Notes Payable to
Stockholders 200000

LESS: Short Term
Portion
Other Long-Term Debt 150000
TOTAL LONG-TERM
DEBT
TOTAL LIABILITIES 850000
Owner's Equity
Common Stock 200000
Retained Earnings 246620
TOTAL OWNER'S
EQUITY 446620
TOTAL LIABILITIES
& EQUITIES 1389620
Interpretation- As per the interpretation of Park Grand London Paddington, it can be
interpreted that the Total Assets of the Hotel are 1389620. Also the Total Liabilities & Equities
are 1389620. Therefore from the Balance Sheet, it can be interpreted that the overall financial
position of the Hotel is very strong and it is able to maintain its strong position without facing
problems and issues. The Balance Sheet of the hotel is able to provide a overall conclusion that
its overall financial position is good enough for the purpose of enhancing the overall level of
profitability in the future (Madera and et.al., 2017).
CONCLUSION
From the above report, it can be concluded that Operational Finance for Hospitality and
Tourism helps in determining the Operational Profitability effectively and efficiently. This can
help in ensuring that the operational efficiency and effectiveness level can be enhanced. The
preparation of Cash Flow Statement, Income Statement and Balance Sheet can be extremely
helpful in ensuring that the overall financial position of an organization can be interpreted
effectively and efficiently. This helps in deriving of conclusions and recommendations for the
future in an appropriate manner. Short-term, Medium-term and Long-term decisions can be taken

in the right manner without problems and issues when the analysis and interpretation is done
correctly.

REFERENCES
Books and Journals:
Filimonau, V. and Delysia, A., 2019. Food waste management in hospitality operations: A
critical review. Tourism management. 71. pp.234-245.
Franco, S. and et.al., 2020. Are you good enough? CSR, quality management and corporate
financial performance in the hospitality industry. International Journal of Hospitality
Management. 88. p.102395.
Hua, N., 2016. E-commerce performance in hospitality and tourism. International Journal of
Contemporary Hospitality Management.
Madera, J. M. and et.al., 2017. Strategic human resources management research in hospitality
and tourism. International Journal of Contemporary Hospitality Management.