Financial management is an important concept of managing the capital, cost and expenses along with recording and analysing. The present report is in context of Carnival Corporation & plc which is the largest travel company all around the world. It has a portfolio of cruise brands in North America, Australia and Europe. The organisation's portfolio of 10 global cruise line brands consist of Carnical Cruise Line, Holland American Line, Fathom, Princess Cruises and Seaborne in North America, Australia and Europe. This report will determine significance of costs and volume within financial management, it will also identify various pricing methods which can be used in the travel and tourism industry. Factors affecting profit and revenue in tourism industry will also be determined along with the methods of managing information needed for travel and tourism services. The report will focus on analysing management system related to finance in Dalata Hotel Group Plc. The interpretation defining financial statements of Dalata Hotel will be also included in this assessment.
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1.1 The importance of costs and volume in financial management in tourism businesses using Carnival Corporation & plc
Carnival Corporation & plc is the world's leading travel company based in United States. Firm has two major segments i.e. Carnival Corporation and Carnival Plc. Company is headquartered at Miami, Florida in United States. They provide effective services related to accommodation and tourism. Cost plays an important role in the success of the company and therefore, it is important to measure different types of expenses and costing within the business.
Significance of Costs
- Direct cost – The cost which is directly associated with every expense of the company is known as direct cost. There are few direct costing of the entity which is depreciation cost, administration cost etc.
- Fixed cost – Fixed cost refers to the expenses which are fixed and do not get affected by the change in volume of production and services. Fixed cost should be paid by an organisation on regular basis for completing of each and every business activity effectively.
- Variable cost – Variable cost in an organisation may change and fluctuate with regard to change in volume of production and services offered to the customers. The variable cost depends upon level of production in the company efficiently.
Importance of Volume
- Break even analysis: If there arise an occurrence of movement and tourism organization, equal the initial investment investigation is additionally central point to figuring and evaluation of the edge of the element ground on the income gathered and connected with the organization which has been assembled by arrangement of different sorts of tourism administrations. This phase of the organization in which income equivalent to costs in the firm adequately.
- Economies of scale: This is additionally the most vital factor for the business to increase appropriate investigation of productivity of business in the organisation in pertinent shape. This is utilized via Carnival Corporation and plc authoritative experts keeping in mind the main goal of cost sparing. This may be utilized as a part of the business as far as diminishing over costing in the organization while outfitting existing tourism benefits in the company proficiently.
1.2 Pricing method used in Carnival Corporation and plc.
Pricing technique is the most important element for organizations such as Carnival Corporation and plc. For ensuring specific pricing for each and every product or services offered to the customers effectively. Various types of tourist cruise services are provided by the company all around the world by different cruise brand of organisation by adopting different types of pricing techniques to increase profitability as well as to enable efficient development of the firm. There are various types of pricing methods which are mentioned as below:
- Marginal costing approach – The marginal costing approach is an effective pricing method which can be utilized by managers in Carnival Corporation & plc. For examining proper cost or price of products and services. The expanding and diminishing in the aggregate cost of creation keep running for making on extra unit for an action adequately. This could be utilized as a part of some particular circumstance where the snout even points happens in the business. This estimating strategy is being utilized by Holland America Line, adequately with a specific end goal to ID of costing in the organization proficiently (Vogel and et.al, 2016).
- Seasonal pricing : Various season has been sees in the nation and vast number of travelers are actualizing this approach shape looking at legitimate evaluating at the work environment. This is characterizes in a few season in which specific volume of vacationer touches base in the nation for investing their nature of energy adequately. Fair Corporation and plc firm need to make set up specific estimating on their assortment of settlement visitor benefits in the business productively to gain greater profitability from the market efficiently.
- Absorption costing approach: This is additionally imperative costing estimation approach, keeping in mind the end goal to think going to benefit of the organization in the business adequately. In this costing technique all the costing related to the generation and settlement administrations arrangement process is measure on per unit. This includes of direct costing, for example, coordinate material and direct work and variable costing and in addition adequately keeping in mind the end goal to analyzing of productivity of the business in the business viably(Mohammed and et.al, 2015).
- Commissions: The commission is utilized as a part of the organization to raising requests of their clients in the firm in compelling structure. There are different traveler operators are working in the organization and producing more commission from the association successfully, so commission premise additionally increment benefit of the firm in the market viably and furthermore increment the viability in the market in important way.
P 1.3 Factors affecting profit for Carnival Corporation & plc
There are various number effective factors in the tourism industry which helps in increasing profit and productivity of the company in efficient way, these factors are defined as below-
- Current Trends – The change in current trends has been occurring in the UK in effective way and people like to live according to the current trend in the market or environment. New ways of accommodation and travel services for various new types of events, parties or occasion needs to be considered by Carnival cooperation & plc.
- Events or occasions: in this day and age, there are quantities of occasions are being sorted out in the organization keeping in mind the end goal to celebrating different kinds of event on some exceptional days. According to current pattern, occasion association has happened to one of the essential factor for every in regard to commend a few things on particular day. Occasions influence the voyaging and tourism business in the market in powerful frame and various quantities of individuals are going for festivity occasions in various diverse area(Ryan and et.al, 2015).
- Seasons: Variety of seasons has been seen in the UK and this is likewise one of the fundamental components which influence profitability of voyaging and tourism business in the business adequately. It has been seen that, individuals needs to go outside for increasing some experience so that, they searching for specific remarkable place for getting unwinding and offer peace to mind successfully. So there are a few sorts of season happened in the organization and volume of client likewise expanding nowadays.
P 2.1 Different types of management accounting information
Administration bookkeeping is most fundamental part for Dalata Hotel Group Plc authoritative administrator with a specific end goal to getting proper data with regard to business' budgetary execution in the business adequately. There are quantities of administration bookkeeping data social occasion and examination strategies exhibited here by which director of the organization can evaluate appropriate execution of the organization in the business in important shape.
Budget reporting: This is likewise most component of administration bookkeeping which may be used by Dalata Hotel Group Plc authoritative trough to arrangement of legitimate financing of different settlement item and administrations giving by the firm towards their clients adequately Director of the partnership plan spending detailing according to foreordained approach, if there should arise an occurrence of future event of costs in the organization by arrangement of a few settlement benefits by the organization's experts in applicable ways(Dzhandzhugazova and et.al, 2015).
Variance analysis:: This is likewise fundamental for the association keeping in mind the end goal to inspected appropriate change between real execution to gage estimations of the organization in significant shape. This is helpful Dalata Hotel Group Plc association in regard to supervise tourist and hospitality business in the industry in more applicable shape. This could be viable when authoritative expert could survey the measure of a difference on slant line, so viable sudden changes can be recognized by hierarchical chief in important way.
Financial statements: Financial proclamations are additionally most imperative approach of administration bookkeeping to appropriate get-together of budgetary data of Dalata Hotel Group Plc association in the business in pertinent frame. These announcements of the firm help the administrator to inspected the monetary situating of the organization in the business and budgetary execution too(Xiang and et.al, 2015).
Forecasting: This is additionally one of the main consideration of administration bookkeeping, by which Dalata Hotel Group Plc authoritative supervisor can set up a standard of the monetary execution in foreordained day and age, in this time length, they need to play out a few sorts of its business work regarding creating appropriate income from the market effectively. According to anticipating standard of the business, they have to perform well each assignment in the organization in adequate way. It's all employees do their undertaking as indicated by foreordained approach, so its normal results could be picked up inside given day and age effectively.
P 2.2 The use of management accounting information as a decision making tool for Dalata Hotel Group Plc.
Payback period: This is most imperative term of administration bookkeeping to look at money streams of the organization and adequately make control on it. This outfits a few qualities to the business experts going to time length in which the proper productivity of sum should be recuperated by them in adequate ways. This approach additionally gives some basic qualities about speculation and projection a proficient quality to increasing legitimate profitability. Furthermore, ensuring that, regardless of whether to embrace the task of the organization keeping in mind the end goal to meet to their coveted money related objectives and targets in adequate way.
Discount income: Discount income is an administration bookkeeping approach which could be utilized by business experts keeping in mind the end goal to estimation of the engaging quality of a speculation opportunity successfully. This strategy gives some successful qualities going to arrangement of future money streams and rebate on some particular projection of the organization in the business adequately. The present qualities' estimation of the organization additionally outfitting viable qualities going to the important appraisal of the capability of interest in adequate frame in powerful way(Mason and et.al, 2015).
Bookkeeping rate of return: Accounting rate of return characterize the normal benefit by the underlying speculation to get proper degree of profitability in the organization in adequate way. This is additionally moved toward which does not consider time estimation of cash in the association with a specific end goal to getting adequate advancement in the firm in viable way.
P 3.1 Interpret travel and tourism money related records
Financial statement of Dalata Hotel Group as on 31 December 2017
Interpretation- Profitablity ratio is used by the managemnt or business manager for measuremnt of the profitablity. In the assessment The Dalala Hotel Group Plc, there has beeen enahncement in the gross profit ratio.
The above illustrated financial statement of the hotel conclude that, there are different factors in which the organization has been giving brilliant exhibitions and furthermore a few territories in which Dalata Hotel Group Plc association has been giving its weaker execution as opposed to its earlier year execution in these areas. The organization's non-current resources of the organization has been expanding step by step in the organization and now it has been come to 42,760 which is sufficient development of the organization from its last year viably(Moutinho and et.al, 2018).
In the year 2016 was 700,450 and following one year it has been raised and come to 730,124 which is adequate development of the organization frame its last year execution in this segment. In addition, if there should arise an occurrence of money and money reciprocals, there are quantities of distinction has been found in the organization which is demonstrating its negative qualities in these figures proficiently. Organization's aggregate resources was in the year 2016 is, 785,920 and following one year in 2017 it spans to 773,956 which is not as much as its earlier year esteems in absolute resources. So it has been said that, organization has been diminished its aggregate resources and which makes negative impact on productivity of the business in given day and age in adequate shape. Next to from it, it has additionally been expressed that, in the event of value share estimations of the organization, its offer capital qualities in it was 1,830 and following one year, its esteem raise by 7 guides promotion came to toward 1,837 which isn't so successful development in share capital of the organization appropriately. If there should arise an occurrence of aggregate value vales of the organization in the year 2016 was 494,600 and following one year it has been come to 492,857 which isn't a positive development of the organization in the business in pertinent frame.
Intrepretaion- Liquidity ratio is dtermined as the variation between liquid asser and the liablities of the bank intitutions. The accounts instruments assist in measuring the protential of organization for paid its liabilities.
Intrepretataion- ewffieciency ratios assis maanger in determing the way that company utilizes its assert and liablities inside. It involves severel ratios such as stock list turnover, fixed asser turnover.
Asser turnover ratio denotes that the number of time the stock of the busienss is sold out. The asser turover ratio is hike by .33% in 2017.
Stock turnover is decrease in the storck ratio which shows that time for which the stock has increased.
P 4.1 Sources and circulation of subsidizing for the improvement of capital undertakings related with tourism
- Financial specialists of the association: This is additionally most fitting wellspring of giving adequate subsidizing to the organization in pertinent shape keeping in mind the end goal to getting business development in the business in adequate frame. There are a few key partners are exhibited here in the organization who are outfitting adequate subsidizing inside hierarchical condition in applicable shape. There are quantities of issues are looking by organization in regard to producing greater productivity from the market. If there should arise an occurrence of tourism and voyaging organization, numerous quantities of key financial specialists re exhibited here in the market who is keen on giving adequate finances in different vital projection of the organization(Walker and et.al, 2016).
- Credits: Loan is additionally a stand out among the most fitting technique for bringing subsidizing up in the organization in adequate way. There are quantities of money related establishments are running in the UK, which is putting forth alluring advance administrations to different associations in the country legitimately. If there should be an occurrence of voyaging and tourism industry, the organization need to take credit in its basic conditions in the business and in the event of absence of working capital in the firm as well.
- Source: Sources of funds are considered to be as the significant for every company. These sources off raising funds assist an organisation in execution of several business operations in systematic manner.
- Capital projects: The capital projects are applicable with the transaction of public as well as non-public organisation to provide infrastructural installation to the society.
The above assignment report concluded that financial management is a very essential element in each and every business. The report identified significance of cost and volume within a leading travel company, Carnival corporation & plc. The various types of accounting tools used for analyzing financial position of the business and market condition are also determined in the report. A brief explanation of financial statement related to Dalata Hotel Group is also included in the above report.
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- Mason, P., 2015.Tourism impacts, planning and management. Routledge.
- Xiang, Z., Magnini, V.P. and Fesenmaier, D.R., 2015. Information technology and consumer behavior in travel and tourism: Insights from travel planning using the internet.Journal of Retailing and Consumer Services,22, pp.244-249.
- Dzhandzhugazova, E.A., Zaitseva, N.A., Larionova, A.A., Petrovskaya, M.V. and Chaplyuk, V.Z., 2015. Methodological aspects of strategic management of financial risks during construction of hotel business objects.Asian Social Science,11(20), p.229.