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Diploma in Travel and Tourism
Unit Number and Title
Unit 2 Financial Management in Travel and Tourism
The research report prepared will discuss about the case study of Merlin Entertainments Plc. The report contains the importance of costs and volume in the financial management. It will also describe the different pricing methods that can be used in travel and tourism as well as various factors influencing the profit of the travel and tourism industry. Further this report includes the power point presentation which will describe the different types of management information required for the travel and tourism industry and how these management information could be used in the decision making process. It also contains the case study of The Restraunt Group Plc in which it will show the interpretation of the financial accounts of the company and comparison of two financial years’ accounts. In the end the report is featured with the poster presentation analysing the sources of funding for the capital projects of travel and tourism industry.
The whole report is bifurcated into four different tasks which will relate the information with the provided company or the organizations. The report discusses the use of management accounting information in the decision making process of the business.
Merlin Entertainment Plc: It is one of the biggest European companies delivering entertainment in more than 23 countries and 115 locations across the world. It aimed at providing its services to the millions all over the globe.
Importance of cost in the financial management of travel and tourism business:
Volume is of different types in the business. For the business like travel and tourism the volume analysis is necessary:
Different pricing methods used in travel and tourism business:
Examples of different businesses from travel and tourism sector:Tourism victoria is the state government tourism which uses the seasonal pricing method in general but prefers dynamic pricing as their pricing method as they can change according to the needs and boom of the travel and tourism industry. Cape tours are the travel and tourism business providing the tours in South Africa and near with the seasonal and package pricing. Easy to book is another travel and tourism business working on the discounting and package deals pricing methods.
There are different factors which influence or impact the profit of the travel and tourism businesses, these are discussed below:
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This task includes the financial performance interpretation of The Restaurant Group Plc for the year ended 27 December, 2015. In this particular task the different ratios are calculated which is describing the performance of the business organisation .(Bujaki, et.al, 2012) Here is the interpretation of the financial performance of the company in the tabular form:
Comparison of financial accounts of two years:
The restaurant group plc:
2014 ( Amount € million)
2015 ( Amount€ million)
Market price share
Total shareholders’ equity
Net Profit Margin ratio
Average Account Receivable
Receivable turnover Ratio
Average stock turnover of the company
Assets turnover ratio
Dividend payout per share
Gross profit ratio
Operating Profit ratio
The different ratios determine the company’s financial performance for the particular year. The detailed interpretation is attempted below for the comparison of two financial performance of the company.(Uechi, et.al,2015)
According to the calculated performance of the company the quick ratio has increased from the year 2014 in the year 2015 to .231783758€. The current ratio has decreased in the year 2015 from .312453755€ to .278622904€. The net profit margin ration has decreased. The receivables have increased over the year to 17861.5€. The creditors has increased to 819153.5€ whereas the receivable turnover ratio has decreased. The value of inventories has increased up to 859€. The solvency ratio has decreased from 0.15786051€ in the year 2014 to 0.14716778€. The company’s assets turnover ratio has also decreased to 1.464245275€. The dividend pay-out per share is increased till0.7€. The P.E ratio of the company has increased in comparison to the year 2014. Overall the company’s gross profit ratio has increased up to 0.185137901€. The operating profit ratio of the company has decreased.
As per the interpretation of the Restaurant Group Plc business performance it is analyzed that the performance of the business is growing and the overall profit of the business is increasing. The business is on its growing period and increasing profits for the business. The financial performance of the business is shown enhanced from the last year. And the profit ratios are providing increment in the year 2015 which is a positive performance aspect for the business. The profit earning ratio of the business had increased which shows the growth in the performance of the business.( Omar, et. al, 2014)
The report researched about the two different companies. The Merlin Entertainment Plc is the travel and tourism business. The report is prepared to understand the importance of cost and volume in the business of travel and tourism and the different pricing method the travel and tourism business uses. The report also presents the management accounting information used as the decision making tool for the travel and tourism business. By conducting this research we can conclude that there are different factors influences the profits of the business of travel and tourism. The report enables us to conclude that the Restaurant Group Plc has the growing performance and the different ratios are interpreted in it. This report concludes that the financial managementand the management accounting is the crucial functioning of the business which overall improves the business performances and the financial position. It increases the profit and enables growth to the business. The report brings us to conclusion that the capital projects of the travel and tourism industry needs a large amount of funds as they are the long term projects and are conducted on the big scale. The funds needs to be distributed properly and according to the government determined percentage.
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