MAN605: Financial Budgeting Report for Moonshadow Hotel, 2021

This report presents a comprehensive financial budgeting analysis for the Moonshadow Hotel for the calendar year 2021. The report begins by outlining the key business objective of predicting the hotel's monthly financial situation and cash flows. It details internal factors such as revenue streams from rooms, food & beverage, and other departments, as well as expense considerations including utilities and salaries. External factors, including regulatory changes and supplier costs, are also addressed. The report identifies the hotel's target market and analyzes market trends. Key assumptions regarding room sales, food & beverage revenue, and other revenue streams are clearly stated. Furthermore, it highlights key performance indicators (KPIs) related to learning and growth, financial improvements. The report also includes information on potential cost savings through resource optimization and expense reduction. The provided bibliography includes relevant sources used for research and analysis.

Running head: FINANCIAL BUDGETING
Financial Budgeting
Name of the Student:
Name of the University:
Author’s Note:

1FINANCIAL BUDGETING
Table of Contents
Budget Notes...................................................................................................................................3
1) Key Business Objective...............................................................................................................3
1.1) Internal Factors.....................................................................................................................3
1.2) External Factors....................................................................................................................3
Regulatory and Legislative Changes...........................................................................................3
2) Key Market..................................................................................................................................3
2.1 Target Market........................................................................................................................3
2.2 Trend......................................................................................................................................4
3) Key Assumptions........................................................................................................................4
4) Key Performance Indicators........................................................................................................4
5) Extra Information........................................................................................................................4
6) Cost Savings................................................................................................................................5
Bibliography....................................................................................................................................6

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Budget Notes
1) Key Business Objective
The key business objective for predicting the financial situation and the various
cash flows the hotel would be experiencing on a monthly basis for a sum of one year. The 12-
Month Summary that has been drawn down for the company has well reflected the revenues,
departmental expenses, undistributed expenses and fixed fees and charged that they would be
incurring. The financial budget has been well done for the Moonshadow Hotel for the Calendar
Year 2021, in which monthly forecast for the company has been done. There were various set of
assumptions and figures which were well taken for the purpose of well preparing the monthly
financial budget for the Hotel for the year 2021.
1.1) Internal Factors
a) Revenue: The key set of revenue that the hotel would be earning will be from Room Tariff,
Food & Beverage Section and other department. There were various assumptions and factors
placed for forecasting the revenue which have been discussed.
b) Expenses: Utilities expenses is well expected to increase for the Hotel by around 2.00% on a
monthly basis and the same has been incorporated. The key heads that were well included in the
Utilities section do comprise of Electricity, Gas and Water. Salaries and Wages would also be
increased whereby the monthly increase would be well aligned with the monthly rate of CPI.
1.2) External Factors
Regulatory and Legislative Changes
Expenses have been well considered on an increasing basis and in order to well
incorporate the same we have well taken the inflation rate effect that is the CPI Index influence
for well accounting for increasing prices and rates. The annual CPI in Australia has been around
1.8% and accordingly the monthly CPI was determined to be 0.15% which was well incorporated
in the rise associated with sales and wages. The monthly CPI has been well determined by taking
the 1.8% CPI index divided by 12 getting 0.15%.
Supplier’s Changes:
 Food Supplier is taken 30% of the sales amount
 Distribution channel cost is predicted to rise by 1.5%.
 Insurance cost has increase by 5%.
2) Key Market
2.1 Target Market
 Corporates
 Families
 Businessman
 Tourists

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 Local People
2.2 Trend
The hotel in the year 2020, would be seeing an positive trend and would only be seeing a
fluctuation in the month of July due to ongoing maintenance work for the hotel.
Economic perspective has been well accounted by incorporating inflation.
3) Key Assumptions
The key assumptions that has been well made for the following sections of hotels is well shown
below:
 Rooms Department: The total number of rooms that will be available for sale in the
hotel will be around 250 rooms and the number of rooms that would be actually sold
would be around 75% and the same will be well increasing by around 1% on a monthly
basis for the company. The room has been well categorized with the help of the three key
services like Transient where rooms would be sold at the rate of $150, Contract would be
sold at $110 and Group would be sold at $105. The number of days would be well sold
for a number of 30 days. Transient would be comprising of 50% room revenue, Contract
would be comprising of 30% and Group would be 20%. The rooms that are available
with the hotel is around 250 rooms and the amount of rooms that would be sold in the
first month would be around 150 rooms accordingly. Now as the hotel well progresses
there business activities it is well assumed that their business operations are well likely
to expand the numbers of rooms that would be sold will be increasing by around 5% on a
daily basis.
 Food & Beverage Department: The F&B Section would be well sold in the form of
750 covers which would be well remaining constant for the sum of twelve months. Food
and Beverage Revenue would be the two key section which would be driving the
revenue in response to covers.
 Other Revenues: The other revenues that the hotel would be well seeing will be in the
form of 5% on a monthly basis and the same would be well seen across all the major
sections in which the hotel would be well seeing an increase.
4) Key Performance Indicators
 Learning and Growth
 Enhance employee satisfaction to reduce turnover rate
 Through employee’s survey and feedback (Leading)
 Financials improvement
 Increase in the level of profitability
5) Extra Information
On an overall basis it was well seen that the EBITDA is growing by more than 4% it was
specially in the month of July the company would be well going under a renovation which is
well done on an yearly basis in which the company would be seeing a fall in the EBITDA

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Margin. However, as the operations resume at a full capacity from August it is expected to post
sound returns. Various changes done in the fixed cost incurred by the hotel has been well
highlighted and accordingly financial budgeting was done for achieving the given set of
outcomes.
6) Cost Savings
Key facts which can be well incorporated for the purpose of cost savings can be optimum
utilization of resources, reducing unnecessary cost and expenses, better training and reduction in
Food and beverage expenses can be some of the key cost saving factors.

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Bibliography
Abor, J.Y., 2017. Financial Planning and Forecasting. In Entrepreneurial Finance for
MSMEs (pp. 199-224). Palgrave Macmillan, Cham.
Cropper, P., 2018. Budgeting and Financial Planning in UK Universities: Accuracy, Caution
and Control in an Era of Financialisation (Doctoral dissertation, University of Huddersfield).
Ittner, C.D. and Michels, J., 2017. Risk-based forecasting and planning and management
earnings forecasts. Review of Accounting Studies, 22(3), pp.1005-1047.
Tekin, A.V. and Konina, O.V., 2017, December. The role of information and communication
technologies in the process of strategic management of entrepreneurial structures activities: the
budget and financial aspect. In Perspectives on the use of New Information and Communication
Technology (ICT) in the Modern Economy (pp. 269-278). Springer, Cham.