FINANCE FUNDING TRAVEL TOURISM SECTOR

FINANCE FUNDING TRAVEL TOURISM SECTOR
STUDENT NAME: AZEB GEBREKIRSTOS FINANCE FUNDING TRAVEL TOURISM SECTOR

STUDENT ID:14818

Executive Summary

FINANCE FUNDING TRAVEL TOURISM SECTORThe business report mainly focuses on the mechanism of financing and funding in the travelling and tourism sectors. The report here give a brief introduction of the various topics regarding financial management in regards with the tourism industry. It further classifies the sections in to four learning outcomes where in the first part it analysed the importance of cost and its importance in decision making process. In the second part it focuses s on the different uses of management accounting and various tools in the tourism industry. In the next part it interpreted the financial accounting to assist decision making in business. And lastly it understands the different sources of funding for development of tourism sectors. It also attaches a brochure and a power point presentation in the last to visualize the accounting change in the industry.

Table of Contents

Introduction

Being one of the largest sectors in the industry, tourism and food sector industries has rapidly growing at a continuous pace for more than a half a century. One of the most vibrant and most thriving industries in the world, these two sectors has been one of the significant factors that have readily affected the economic growth, environmental factor and most importantly the investment sector. It has been since the booming sectors in the economy where large scale investment has been involved.

The report helps us to acquire knowledge and technique which will assist with controlling of efficient decision making process in the tourism and food sectors. The report will emphasize the importance of cost that helps to generate huge profits in these sectors. The majority of the report gives importance to the financial reports, which are practised in the micro level and funding arrangement system for developing of large scale projects at macro level. The report highlighted that the learners can gain knowledge on tourism and travel sectors and food sectors and understands the basic fundamentals of all the financial cost and funding arrangement in the process. This report has taken Merlin Enterprise and The Restaurant Group (TRG) to analysis the funding and investment procedure.

TASK 1 (LO1, AC1.1, 1.2, 1.3, M1, M2, M3, D1, D2, D3)

LO1- Understand the importance of costs, volume, and profit

P1.1 Explain the importance of costs and volume in financial management of travel and tourism businesses

According to Guttentag(2015, p.1192), tourism business sectors are huge business and such huge business are known by the term “business entities” because of their large scale volume of investment and generation of profits. The tourism sectors also involve the different kinds of financial structure whose financial reporting is slightly different from others. Merlin enterprise is one of the most leading sectors in the entertainment and Leisure Company in the world.

In this section the importance of cost is analysed in order to emphasize its importance in financial management. Different objectives of the business enterprise the management of the company needed to keep a proper balance between its various sources of expenditure. These include understanding of various types of cost like direct cost, variable cost, fixed cost, capital cost and cost on other social heads. Merlin entertainment has to understand several types of cost in order to access several types of spending and accessing different prices of services (Usaid.gov, 2017).

In this approach, Cost Value Profit (CVP) analysis has been considered to establish the relationship between cost and sales of the company. The CVP analysis is concerned with the operating profits and how it is influenced with the change in the variable cost and fixed cost. This process helps the managers of the company to achieve to desired profits without acquiring any loses in the future which will help in turn to evaluate fixed cost and estimating financial losses (Maloletko et al. 2014, p.25).

There are also other cost which involves direct costs, indirect costs

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