Delivery in day(s): 5
Diploma in Travel and Tourism Management
Unit Number and Title
Unit 2 Finance and Funding in Travel Tourism
The case study of the Merlin Entertainment Plc. has been studied for the research report. The various pricing methods and the significance of the costs and the volumes are discussed under this report. The report will show the power point presentation to describe the concept of the management accounting information and the various importance of the management accounting information system in an organization to make the effective decisions. Further in this report the case study of the Restaurant Group Plc. is also discussed in which the financial accounts of the company for the two years and the comparison between them are done. The report will be showing the poster presentation which will discuss about the sources of funds needed for the capital projects in the travel and tourism sector.
The aim or the purpose of the report prepared is to build an understanding related with the costs, volume and the profit as well as to understand the sources of funds and the management information system needed in the decision making process in the business.
The Merlin Entertainment Plc. is the company which is offering the entertainment and its unusual unique services around the world. Merlin Entertainment Plc. is best company which is serving on the international level and expanding its business all over the world. The importance of the costs and the volume in the business are discussed below.
Cost- Costs are the expenses that the company faces in the operational or the financial activities of the company. The value of the money is the cost. Majorly the business is affected by the costs. It maintains the financial balance in the business. The changes in the costs influence the business (Hosni, et.al, 2013).
Volume-Volume is the amount of the expenses or the quantity of the costs in the business activity. The Volume is also the expenses that the company will face in the amount of the quantity. The volume is denoted in the monetary terms (Hosni, et.al, 2013).
Significance of the costs in the travel and tourism sector:
The Merlin Entertainment Plc. uses the cost reduction strategy to attract the customers and gain the extra benefits and the profits to the company.
Importance of the volume to the travel and tourism business are:
Merlin Entertainment Plc. works on the analysis of the break-even point so as to know when the cost of the business can be recovered (Kim & Dale, 2015).
There are different pricing methods for the business to attract the customers and gain the benefit of maximum profits but the cost of the company should be covered under these pricing methods. The various pricing method of the travel and tourism business are-
Examples of some of the businesses in the travel and tourism sector are here below-
City and guilds is the company which is in UK follow the market led method of pricing so as to attract more and more customers and increases profit earning of the company. The Kenya safari uses the profit led method of pricing strategy to make the business safe from the risk of reducing or losing the customers (Herman bin Mohammad Afandi, et.al, 2013).
Some of the factors that influence the profits of the travel and tourism business of Merlin Entertainment Plc. are mentioned here:
As because of the terrorist attacks in the Mumbai, India the travelling and the tourism sector of India was affected worst for some time. City and guilds business is impacted by the seasonal change.
The case study of the Restaurant Group Plc. is discussed here. The financial performance of the company is interpreted here to understand the financial position of the business and to understand the company’s profitability and the liquidity status. The financial performance of the company is interpreted here:
Financial accounts for the two years of The Restaurant Group Plc. is shown below:
2014 ( Amount £ million)
2015 ( Amount £ million)
Market price share
Total shareholders’ equity
Quick Ratio (Total Current assets – Inventory – Prepaid expenses/ Total Current Liabilities)
Current Ratio (Current Assets/ Current Liabilities)
Net Profit Margin ratio (Net Income/Net sales)
Average Account Receivable
Receivable turnover Ratio (net credit value/average account receivable)
Average stock turnover of the company
Assets turnover ratio ( Net Sales/ Average Total Assets)
Solvency Ratio (Total Current assets – Inventory – Prepaid expenses/ Total Current Liabilities)
Dividend payout per share
P/E ratio (Price per share/ Earnings per share)
Gross profit ratio (Gross profit/ Net sales)
Operating Profit ratio (Operating profit/ Net sales)
Above is the calculation of the different ratios that shows the financial performance of the business for 2015. The company from the above calculation shows that the revenues of the company and the current assets of the company has increased in the year 2015 whereas the company’s liabilities are shown a decrease in the year 2015 which helps the company in gaining the higher financial performance (Marchini & D’Este, 2015). The profitability ratios of the company has a increase over a year which tells that the profits of the company increases. The liquidity of the company has increased which provides the trustworthy company image to the Restaurant Group Plc. and the current ratio is also increased in the year 2015. The net profit ratio and the gross profit ratio of the company has an increase from the last year which determines the company has the profitability performance in the year 2015 and the liquidity of the company has been measured easily liquid (Drew & Dollery, 2016).
From the above interpretation it can be concluded that the business of the company has an increase over the last year and the performance of the company is enhanced in the year 2015. The company has the growing stage and the financial performance of the company shows the huge profits to the company. The ratios of the company provides the growing aspect to the business and the increment in the profitability of the company provides the overall increment in the financial performance of the company (Delen, et.al, 2013).
From the above report prepared the conclusion can be dawn that the Merlin Entertainment Plc. is using the various pricing and the profit strategy to attract the customers and the costs and volume analysis are done by the company to measure the financial position of the company as well as the business financial performance is properly analyzed the different benefits of the costs and the volume which the company has are discussed. The factors which affects the travel and tourism business of the company are also discussed in the above report to understand the various influencing factors of the business of the travel and tourism in the world. The aim of the report to understand the costs and the volume and the source of the funds are achieved by the study of this report.
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