Accounting And Financial Analysis In The Hospitality Industry

by Hales

• ISBN13: 9780750678964
• ISBN10: 0750678968
• Format: Paperback
• Copyright: 2005-08-01
• Publisher: Elsevier Science & Technology

Summary

The objective of this textbook is to teach students to be conversational in speaking "numbers.” This means understanding fundamental accounting concepts, developing solid financial analysis abilities, and then applying them to understand and improve the operational performance of their hotel or restaurant. The book will accomplish this by studying the current practices of some of today's leading hotel and restaurant companies. Chapters will be developed under the auspices of a select group of hospitality industry General Mangers, Directors of Finance, and Regional Accounting Managers to ensure that the information is current, accurate and useful. Understanding and applying the information will be the main focus of this book. This textbook should provide hospitality managers the knowledge and experience to be comfortable in using numbers to operate their departments. This includes developing the ability to perform all accounting and financial aspects of their position efficiently and correctly including revenue forecasting, wage scheduling, budgeting, P&L critiques, purchasing procedures and cost control methods. As a result, they will have more time to spend on the floor with their customers and employees. This knowledge will help them understand their operations and how to improve, change or expand them to increase revenues or profits.

Author Biography

Joh Hales is Assistant Professor in the School of Hotel and Restaurant Management at Northern Arizona University teaching Hospitality Accounting, Hospitality Corporate Finance, Resort Management and Senior Seminar

Table of Contents

Preface	ix
Foreword	xiii
Introduction to Numbers, Accounting, and Financial Analysis	1	(26)
Numbers: The Lifeblood of Business	3	(3)
Career Success Model	6	(3)
The Three Main Financial Statements	9	(6)
Revenues: The Beginning of Financial Performance	15	(5)
Profit: The Ultimate Measure of Financial Performance	20	(3)
Summary	23	(1)
Hospitality Manager Takeaways	24	(1)
Key Terms	24	(1)
Formulas	25	(1)
Review Questions	26	(1)
Foundations of Financial Analysis	27	(20)
Fundamental Methods of Financial Analysis	28	(2)
Comparing Numbers to Give Them Meaning	30	(2)
Measuring Change to Explain Performance	32	(2)
Using Percentages in Financial Analysis	34	(1)
Four Types of Percentages Used in Financial Analysis	35	(4)
Trends in Financial Analysis	39	(2)
Summary	41	(1)
Hospitality Manager Takeaways	42	(1)
Key Terms	42	(1)
Formulas	43	(1)
Review Questions	43	(1)
Problems	43	(4)
Accounting Department Organization and Operations	47	(20)
Organization Charts	48	(9)
Accounting Operations in Full-Service Hotels	57	(5)
Accounting Operations in Restaurants and Smaller Hotels	62	(2)
Summary	64	(1)
Hospitality Manager Takeaways	65	(1)
Key Terms	65	(1)
Review Questions	66	(1)
The Profit and Loss (P&L) Statement	67	(22)
Hotel Consolidated P&L Statements	69	(6)
Formats for a Consolidated P&L	75	(7)
Department P&L Statements	82	(2)
Summary	84	(1)
Hospitality Manager Takeaways	85	(1)
Key Terms	86	(1)
Review Questions	87	(2)
The Balance Sheet (A&L) and Statement of Cash Flow	89	(22)
The Balance Sheet or Asset and Liability (A&L) Statement	90	(9)
Working Relationships between the Balance Sheet and the P&L Statement	99	(2)
The Statement of Cash Flow	101	(6)
Summary	107	(1)
Hospitality Manager Takeaways	108	(1)
Key Terms	108	(1)
Review Questions	109	(2)
Hotel Management Reports	111	(24)
Internal Hotel Management Reports	112	(1)
Daily Reports	113	(12)
Weekly Internal Management Reports	125	(2)
Monthly Internal Management Reports	127	(4)
Summary	131	(1)
Hospitality Manager Takeaways	132	(1)
Key Terms	132	(1)
Review Questions	133	(2)
Revenue Management	135	(18)
REVPAR: Revenue per Available Room	136	(5)
Rate Structures and Market Segments	141	(2)
Revenue Management Systems	143	(4)
Selling Strategies	147	(2)
Summary	149	(1)
Hospitality Manager Takeaways	150	(1)
Key Terms	150	(1)
Review Questions	151	(2)
Comparison Reports and Financial Analysis	153	(20)
Profitability: The Best Measure of Financial Performance	154	(5)
Review of Chapter 2: Foundations of Financial Analysis	159	(2)
Variation Analysis	161	(6)
STAR Market Report	167	(3)
Summary	170	(1)
Hospitality Manager Takeaways	170	(1)
Key Terms	171	(1)
Review Questions	171	(2)
Forecasting: A Very Important Management Tool	173	(56)
Forecasting Fundamentals	175	(1)
Types and Uses of Forecasts	176	(6)
Revenue Forecasting	182	(2)
Wage Forecasting and Scheduling	184	(1)
Summary	185	(1)
Hospitality Manager Takeaways	186	(1)
Key Terms	186	(1)
Review Questions	187	(1)
Problems	187	(42)
Budgets	229	(20)
The Use of Budgets in Business Operations	231	(3)
Annual Operating Budgets	234	(2)
Formulas and Steps in Preparing a Budget	236	(4)
Capital Expenditure Budgets	240	(3)
Summary	243	(1)
Hospitality Manager Takeaways	243	(1)
Key Terms	244	(1)
Review Questions	244	(1)
Problems	245	(4)
Corporate Annual Reports	249	(16)
The Purpose of Corporate Annual Reports	251	(3)
The Message to Shareholders	254	(3)
The Content of the Corporate Annual Report	257	(4)
Financial Results for the Years	261	(1)
Summary	262	(1)
Hospitality Manager Takeaways	263	(1)
Key Terms	263	(1)
Review Questions	264	(1)
Personal Financial Literacy	265	(14)
Personal Financial Literacy	266	(5)
Managing Personal Finances	271	(3)
Evaluating Assets and Sources of Income	274	(2)
Summary	276	(1)
Hospitality Manager Takeaways	277	(1)
Key Terms	277	(1)
Review Questions	278	(1)
Glossary	279	(8)
Index	287