Financial Analysis

Financial Analysis

Element 1

A staff award increase of almost 3 % will come under the profit & loss statement but under a new expense that is rewards and increments in order to cater for CPI. However; the wages and on cost budget was not be changed in order to in order to incorporate this increase but it was seen that the wage and cost in the year 2008 were below the budgeted figures of the Hotel. Hence; it did not show a negative impact for the business. This award will increase the overall expenses of the hotel.

A 6 % increase in the beverage sales which was not included in the profit and loss statement would have actually increased the revenues of the business and the hotel made a mistake of not incorporating it.

A contingency fund is essentially a store reserve set aside to handle unforeseen duties that are outside the reach of the typical managing plan. This model of administering hold cash as security against conceivable misfortune in the occasion of a crisis scenario could be used in various scenarios. If a manager needs to increase his or her overall spending budget, that normally requires the use of a process called “emergency funding” or request for non-budgeted funds that is presented to the next higher management level. The next higher level may have a budget item where funds specifically are set aside for such contingencies (www.business-case-analysis.com). Or, upon demonstrated need, these funds may have to come from current assets, such as cash on hand or the sale of stock owned for investment purposes.

Element 2

Financial plan is a crucial action for each business independent of its age and measure. For new ventures, the readiness of financial projections is fundamental to the business arranging methodology. For greater associations, money related arranging structures part of yearly rationing and plays a significant part in lifelong arranging, business estimations, corporate growth etc. A budgeting team or finance committee from the finance department is responsible for the budgets contents and the financial plans and eventually reporting and getting the same approved by the manager or head of the business (financialplan.about.com).

A financial plan is not a proclamation of what is sure to happen yet rather a projection to highlight noteworthy money related and operational issues or situations that must be tended to if objectives are to be accomplished. Financial planning grows a business's attentiveness ...