Management Accounting Information in Travel & Tourism Sector

This report discusses the importance of management accounting information in the travel and tourism sector, focusing on its role in effective decision-making. It highlights key components such as financial statements, budgets, variance analysis, management information systems (MIS), and forecasts, explaining how each tool provides valuable insights for stakeholders like investors and creditors. The report also examines the practical applications of management accounting information, including trend analysis, inventory management, and performance measurement. It emphasizes the use of forecasting for effective planning and control, as well as the application of investment decision tools like NPV and IRR. Ultimately, the report concludes that management accounting information is crucial for cost control, revenue enhancement, and overall financial health within the travel and tourism industry.

FINANCE AND FUNDING

TASK 2

TABLE OF CONTENTS
INTRODUCTION
2.1 Types of management accounting information in
travel business
2.2 Discussing use of management accounting
information
CONCLUSION

INTRODUCTION
Management accounting information has importance in
the business. It help management to take effective
decisions.

Cont.
• 1. Financial statements-
• Financial statements such as cash flow statement, balance sheet
and income statement play crucial role in providing information of
company's financial health.
• It is important decision-making tool for Dalata Hotel Group Plc and for
various stakeholders.
• Creditors and investors are benefited by such information to take
enhanced decisions.
• They are able to assess profitability and solvency aspect of company in
effective way.
• It is essential tool for company so that in case of deficiency, viable
decisions are taken to improve financial condition in effectual way.

Cont.
• 2. Budgets-
• Budget is another useful tool for achieving desired
profit margin by estimating income and expenditures for the
upcoming period.
• Budgets are financial goal which should be accomplished in
timely manner to enhance profits.
• It helps to initiate control over the expenses so that profits can
be achieved quite effectively.
• Moreover, budgets are prepared so that costs may not exceed
revenue of firm.
• It helps Dalata Hotel Group Plc to take control over
expenditures to maximise revenue.

Cont.
• 3. Variance analysis-
• Dalata Hotel Group Plc plans for budgeted output so that it can be
matched with the planned output.
• This is essential to carry out deviations if any in the actual output with
planned one.
• Such deviations are called variance and procedure to carry out such
analysis is termed as variance analysis.
• Thus, to overcome variances, corrective actions are taken so that
improvements can be implemented.
• Hence, variance analysis is useful for making enhanced decisions with
much ease.

Cont.
• 4. MIS (Management Information System)
• MIS is modern tool for making quick and efficient decisions.
• Computer system and other related devices are used to enter customers'
data.
• Other data is also entered including supplier's invoices and adequate
information is provided to the management.
• Adequate database is maintained for analysing information.
• It help management to take effective decisions regarding efficiency,
effectiveness of departments to manage them easily.
• Thus, typical problems are analysed by the management and relevant
solution is attained so that underlying issues may be solved quite easily

Cont.
• 5. Forecasts
• It is effective tool for making decisions by analysing future
trends. In simple words, prediction is made regarding future events by
taking past events.
• Management takes better and effective decisions regarding forecasting of
operational activities so that maximum value may be attained.
• Planning, budgeting and enhanced growth are accomplished with the help
of forecasting.
• Risks can be effectively tackled by forecasting future events.
• Moreover, needs and demands of various departments are also
accomplished by initiating forecasting.
• Thus, it is primary tool for decision-making to extract concrete results.

2.2 Discussing use of management accounting
information
• Management accounting information is quite useful for
comparison with trends. In relation to this, trend analysis is
useful tool for improving business operations by comparing
actual trends with past trends so that deviations can be
assessed.
• If performance of Dalata Hotel Group Plc is become
ineffective in present, then management can implement
strategies for achieving efficiency.
• Management accounting information is useful tool for
stakeholders to take viable decisions.
• Dalata Hotel Group Plc is able to provide financial
information to stakeholders so that they may assess and take
better decisions.

Cont.
• Profitability and solvency is required to be analyse by them so
that they provide funds for effective functioning.
• Management accounting information is useful for handling
adequate amount of inventory.
• This is important as Dalata Hotel Group Plc has scarce
resources and stock needs to be handled effectively.
• Overstocking will result into incurring of additional costs of
handling in the warehouse.

Cont.
• th actual one so that variances may be analysed.
• For overcoming this, corrective actions are taken so that
improvements can be done with much ease.
• ity and reduce spoilage of resources.
• Management accounting information is quite useful for
measuring budgeted output with actual one so that
variances may be analysed.
• For overcoming this, corrective actions are taken so that
improvements can be done with much ease.