Finance & Funding: Management Accounting for Tourism Sector

This report delves into the realm of finance and funding within the travel and tourism sector, emphasizing the crucial role of management accounting information in informed decision-making. It highlights various management accounting tools, including financial statements (income statement, balance sheet, and cash flow statement), budgeting techniques, variance analysis, and forecasting methods, which provide essential financial insights to management. The report further elaborates on the utilization of management accounting information as a decision-making tool, covering aspects such as comparison with trends, investment strategies, capital raising, addressing current financial issues, and developing new products and services within the context of Merlin Entertainment. The analysis demonstrates how these financial tools and insights enable businesses to make strategic decisions, optimize financial performance, and achieve long-term growth in the dynamic travel and tourism industry. Desklib provides access to a wide array of similar solved assignments and resources for students.

Finance and funding in travel
and tourism
Task 2

2.1 DIFFERENT TYPES OF MANAGEMENT
ACCOUNTING INFORMATION
Financial Statements
 One of the important tool which gives accounting as well as
financial informations to the management of the firm.
 Financial statements are such as income statement, statement of
financial position or balance sheet and statement of cash flow
which shows financial performance of the business in industry.
 The tool gives wide information of accounting which help to
measure financial performance of company.

Budget
 Budget is a statement which give information of estimated
cash inflow and cash outflow to the firm for the current
years.
 The method is used by all companies to make estimation of
its income and expenditure.
 There are various types of budgets and methods which
helpful to derive financial information to the management.

Variance analysis
 Variance is a value which derives from actual and budget
data which provide accounting information to the company.
 Variance is a difference between budgeted value and actual
value. Variance shows that company is able to meet its
budget data with actual data or not.
 When variance is in positive then company is in favourable
situation while when variance is in negative term then
company is not able to meet budget data.

Forecasts
 Another tool of accounting information is forecast where
company is able to forecast financial information for
upcoming years on the basis of past financial data.
 From the tool management able to forecast various cost,
revenue and profit for the next accounting years as per the
past performance of the firm.
 Every company is often forecast for next years, it will help
to prepare better and effective strategies.

2.2 USE OF MANAGEMENT ACCOUNTING
INFORMATION AS A DECISION-MAKING TOOL
Comparison with trends
 Accounting informations are help to business in order to
compare current trend with past trend of the firm.
 At the time of comparison if firm know about the
problem then it will able to take corrective action and
able to formulate effective strategies to achieve business
goal.
 It will help to firm to take appropriate business decisions.

Investment
 From financial information management able to know
about the cost and profit of the product and services.
 It shows that company is able to generate profit or loss, if
it gets profit then take decisions to make investment. On
the other hand if it is in loss then able to take corrective
actions.
 Hence, it can be said that accounting data are used to take
decision of investment making by the Merlin Plc.

Raising capital
 Another use of financial data in raising fund from market
which is very important for every organisation.
 From the past and current accounting informations firm is
able to know that how much fund will be require for
upcoming years.
 On the basis of these informations company take
decisions for raising fund from various sources.

Current issues
 Issues in this context are what company currently facing
in financial terms. From the accounting data company
can know several issues which faced by the company.
 Issues are can be several such as increasing cost,
changing tastes and preferences of consumers, inflation
rate etc. which hamper financial performance of the firm
in the industry.

New products and services
 The management of Merlin Entertainment is able to
know financial situations and on the basis of this,
company able to take decisions that whether it should
expand and increase its products and services.
 It is very important decisions which taken by the
managers and help to grow the business.

References
Deluna Jr, R. and Jeon, N., 2014. Determinants of
International Tourism Demand for the Philippines: An
Augmented Gravity Model Approach.
Eagles, P.F., 2014. Fiscal implications of moving to tourism
finance for parks: Ontario provincial parks. Managing
Leisure. 19(1). pp.1-17.
Evans, N., Stonehouse, G. and Campbell, D., 2012. Strategic
management for travel and tourism. Taylor & Francis.

Thank You