Hotel financial management
ALLIED PAPER IX
HOTEL FINANCIAL MANAGEMENT
CREDITS: 2
Learning Outcomes:
 Students learn basics of financial management.
 Students know how to analyses financial statement analysis.
 Gain knowledge of implementing ratio.
 Knowledge of financial sources and financial planning
UNIT - I
hours)
Hotel Financial Management: Introduction, Meaning, Scope, Objectives, Goals.
(3
UNIT - II
(5
hours)
Financial statements meaning and types- Techniques of financial analysis- Limitation of
financial analysis. Practical problems.
UNIT - III
(7 hours)
GST - Meaning, types, rates in Hotel, GSTR-3B. Hotel business licenses and permits.
Meaning of TDS TAN, PAN , Luxury Tax, FSSAI, Service tax, Entertainment tax, Property
tax, Water tax, Professional tax, Foreign exchange, Multistoried building tax, Weights and
Measures certificate, Hygiene and Sanitary certificate, Structural Safety certificate.
UNIT - IV
(8 hours)
Sources of long term finance: Equity Shares-Features, Merits, Limitation. Preference sharesFeatures, Types, Merits, Limitations. Debentures – features, Types, advantages, limitations.
Term loan- Meaning, features, Advantages, Limitations. Retain Earnings-Meaning,
advantages, Limitations. Dividend Policy- Meaning, Determinants of dividend policy, forms
of dividend. Bonus shares- Meaning, Advantages. Stock split, Right issue- meaning, features,
advantages. (Only theory)
UNIT - V
(9
hours)
Financial Planning: Meaning, process, steps, Importance, Objectives, Scope, Characteristics
of sound financial plan, factors affecting financial plan, Limitations. Capital structure:
Meaning, Objectives, factors determining capital structure. Working capital: Meaning,
importance, sources, types, factors determining working capital. (Only theory)
References:
 R. Ramachandran, Financial Management theory, Problems and Solutions, Sriram
publications,2008
 Prasanna Chandra, Financial Management, 7th edition Tata MC Graw Hill, 2008.
 Khan M Y and Jain P K, Financial Management, Text, problems and Cases- Tata Mc
Graw.
Unit II FINANCIAL STATEMENTS
2 Marks
1.
2.
3.
4.
5.
6.
7.
8.
9.
What do you mean by trading on equity?
Explain the term dividend policy.
Write any two financial tools./ List out the tools of financial statement analysis.
List out any two objectives of financial statement analysis.
What are financial statements?
What is meaning of financial analysis?
Who are the users of financial analysis?
What is the need of financial statement?
What are the types of financial statements?
5 or 10 Marks
1. What are the tools/techniques/methods which are being used for financial statement
analysis?
2. What are the advantages of financial statement analysis?
3. Describe the different types of financial Statement Analysis.
4. What are the limitations of financial statement analysis?
Unit II Financial Statement Analysis
1.
From the following prepare comparative statement
Particulars
2011 Rs.
Sales revenue
685000
Cost of Sales
250000
Payroll expense
191000
Administration
63000
Marketing expense
17000
Repairs and Maintenance
22,000
2012 Rs.
750000
285000
195000
69000
21000
24,000
Solution:
Comparative Income Statement
Particulars
Sales
Less: Cost of Sales
Gross Profit
2011
2012
685000
250000
435000
750000
285000
465000
Increase/
decrease
%
+65000
+35000
9.5
14.0
+30000
6.9
Operating expenses
Pay roll expenses
Administration
Marketing expenses
Repairs and Maintenance
Operating Income
2.
309000
+4000
+6000
+4000
+2000
+16000
2.1
9.5
23.5
9.1
5.5
156000
+14000
9.9
191000
63000
17000
22000
195000
69000
21000
24000
293000
142000
From the following information prepare a comparative income statement
Particulars
Sales
Cost of Sales
salaries and wages
Advertisement
Repairs
Administration
2010
65000
22000
5000
3500
1000
1400
2011
80000
26000
11000
4000
1200
1800
Solution:
Comparative Income Statement
2010
2011
Increase/
decrease
%
65000
22000
80000
26000
+15000
+4000
23.08
18.18
Gross Profit
Operating Expenses
salaries and wages
Advertisement
Repairs
Administration
43000
54000
+11000
25.58
5000
3500
1000
1400
10900
11000
4000
1200
1800
18000
+6000
+500
+200
+400
+7100
120.00
14.29
20.00
28.57
65.14
Operating income
32100
36000
+3900
12.15
Particulars
Sales
Less: cost of Sales