Unit 2 Finance and Funding in Travel and Tourism Assignment Copy

Finance and Funding in Travel and Tourism Assignment Copy

Unit 2 Finance and Funding in Travel and Tourism Assignment Copy


Diploma in Travel and Tourism Management

Unit Number and Title

Unit 2 Finance and Funding in Travel and Tourism

QFC Level

Level 5

Unit Code



This report is about the finance and funding of the Merlin entertainment Plc. The company is involved in the working of the entertainment business and is also one of the largest company in that respect. Apart from that it also helps the company to enhance the travel and tourism industry in the country. In this assignment Merlin entertainment Plc. cost and volume relationship is shown as well as pricing strategy in that concern is also shown with proper description. Apart from that presentation of the management accounting is also shown. Interpretation of the ratio of Restaurants Plc. is described in an effective manner. And at last description of the capital projects is showcased in poster.

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Task 2 Presentation


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Task 3

3.1 Interpret financial accounts of The Restaurant Group (TRG) Plc. for the year ended 27 December 2015 showing at least two years performance (for example comparing 2015 to 2014).

The restaurant group is the chain of restaurant that operates in Britain and is also listed on the stock exchange of FTSE Index. It works and operates several brands of public houses as well as restaurant like Chiquito, Coast to Coast, Garfunkel’s, Brunning & Price and any others. They also works towards the motive to generate profits for the company due to which they have planned to focus on the travel and tourism business in relation to the restaurant business.

For this purpose the financial analysis of the company is conducted by calculating all the financial ratios that would be required to conduct the business in a proper manner and effective extension of the financial performance be taken into account. The table given below shows the ratios of the company.

Computation of ratio of The Restaurant Group



2014 ( Amount in € million)

2015 ( Amount in € million)

Sales Revenue



Market price share









Current Assets



Total Assets



Current  Liabilities



Total shareholders’ equity



Noncurrent liabilities












Gross profit



Operating profit



Quick Assets



Profitability ratio



Gross profit ratio (Gross profit/ Net sales)



Operating Profit ratio (Operating profit/ Net sales)



Market ratios



Dividend payout per share (Dividend/ Net income)



P/E ratio (Price per share/ Earnings per share)



Liquidity ratio



Quick Ratio (Total Current assets – Inventory – Prepaid expenses/ Total Current Liabilities)



Current Ratio (Current Assets/ Current Liabilities)



Activity ratios






Assets turnover ratio ( Net Sales/ Average Total Assets)



Receivable turnover Ratio (Ratio (net credit value/average account receivable)



Leverage ratios



Solvency Ratio (Total Current assets – Inventory – Prepaid expenses/ Total Current Liabilities)



Analysis and interpretation of ratios

Profitability ratio

Gross profit ratio-It shows the ability of the company to generate profit in relation to the ales of the company as per the gross profit of it. This ratio has increased that indicates that company is making various efforts to increase its gross profit in relation to the sales of it.
Operating profit ratio-Operating profits of the company has decreased in relation to the sales of the company. This ratio has decreased in relation to the previous year that shows that operating activities of the company is required to put more planning and efforts that would help in the better working of it.

Market ratios

Dividend payout ratio-It shows the relation that possess between the amounts that is paid by the company to its shareholders from the profits it earn from its working. Company DPS has increased that indicates that it has distributed dividend to the shareholders in more amount as compared to the previous year. But company is required to possess some retained earning so that an effective working may be done by it.
Price earnings ratio- It showcase the relationship between the actual price of the shares and the price that is prevalent in the market. Price earnings ratio has increased over the previous years that shows that the company has possess many strategy so that it may work and stand on the market in an effective manner (Parsian & Koloukhi, 2014)

Liquidity ratio

Quick ratio-It shows that ability of the company to meets its short term liability on time. Company has increased its quick ratio that indicates that company is required to be make certain amendments so that this ratio may come to the optimum level so that a better performance may be done by the company.
Current ratio-This ratios also shows the ability of the company to pay its short term liability on time. Current ratio of the company is low that is not a good sign for the company as it would create a problems to meet the short term liability that may hamper the reputation of the company (Durrah et.al, 2016)

Inventory ratio

Asset turnover ratio-It indicates the efficiency of the business strategy in relation to its assets when revenue or sales is generated. This ratio has decreased in relation to the previous year that is also a not good sign for the company. It is required to make changes so that assets may be utilized in an effective manner.
Receivable turnover ratio-This ratio has also decreased by comparing the previous year assets turnover of the company. So company is required to make necessary changes that can become effective for the company (Wu & Zhao, 2016).

Leverage ratios

Solvency ratio-This ratio indicates the company position in relation to the target of meeting all its long term liability on time. Company’s ratio is less that indicates that solvency of the company is required to be improve for the effective working.


This assignment helps to indicate the finance and funding aspects of the Merlin entertainment that shows that company has taken all the correct measures and analyze all the factors that helps it to make necessary working for its betterment. Apart from that management accounting has also played an important role for its fiancig activities. Also the Restaraunt group should make certain changes in the financial aspects of it. Funding in the capital projects is also required to be made appropriately.


Durrah, O., Abdul Aziz Abdul Rahman, Jamil, S.A. & Ghafeer, N.A. 2016, "Exploring the Relationship between Liquidity Ratios and Indicators of Financial Performance: An Analytical Study on Food Industrial Companies Listed in Amman Bursa", International Journal of Economics and Financial Issues, vol. 6, no. 2.
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Parsian, H. & Koloukhi, A.S. 2014, "A study on the effect of free cash flow and profitability current ratio on dividend payout ratio: Evidence from Tehran Stock Exchange", Management Science Letters, vol. 4, no. 1, pp. 63-70.
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Wu, H. & Zhao, Y. 2016, "Optimal Leverage Ratio and Capital Requirements with Limited Regulatory Power", Review of Finance, vol. 20, no. 6, pp. 2125-2150.
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Yang, Q. 2015, "Local Smoothness Enforced Cost Volume Regularization for Fast Stereo Correspondence", IEEE Signal Processing Letters, vol. 22, no. 9, pp. 1429-1433.

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