Financial Ratios from Income Statements from Hospitality Management

Financial Ratio of the Income Statement: Hotel management accounting is used to identify and record financial problems and generate information about the organization's assets, liabilities, and investments. Through this process, the management of the hotel management understands and explains financial ratios essential for basic management of business operations. The most important financial ratios in Hotel Accounting include the average daily rate, occupancy rate, room sales and gross sales, percentage of cost of goods sold, room and restaurant margin, room management fee, Sales are included. Cost Percentage

Ratio analysis is one of the most widely used tools to define the financial strength of financial statements. The financial statements include the balance sheet, income statement and income statement. These ratios provide a detailed study of projects to improve the availability of financial statements (Healey and Palepu 2012). Liquidity is defined as the soul of an enterprise organization that highlights the structure of an enterprise organization. However, because liquidity is lacking, the bankruptcy position will be considered at the calculated ratio. In the case of investment, the two ratios suitable for the structure are "flow ratio" and "speed ratio" also called acid test ratio (Goodhart 2013).

Ratio analysis is a type of financial statement analysis that quickly shows the company's financial performance in several key areas. These ratios are divided into short-term solvency ratio, debt management ratio, asset management ratio, profitability ratio, and market value ratio. Ratio analysis has several important characteristics as a tool. These data are provided by financial statements and are readily available. Calculating ratios helps you compare companies of different sizes. This ratio can be used to compare the company's financial performance with the industry average. In addition, you can use ratios in the form of trend analysis to identify areas where performance gains or decreases over time.

Normally, performance is measured using the company's financial information. In fact, the ratio analysis of the numerical values ​​of the financial statements was done. The financial statements include the company's income statement, balance sheet, cash flow statement, and equity statement. There are several types of ratio, such as profitability, liquidity, efficiency, leverage ratio, investor ratio. The following sections briefly explain these ratio groups. The result of this ratio can also be compared with the number of days available. Often, companies do not want customers to spend more time paying their own suppliers, which could otherwise affect cash flow. Generally, the longer the payment period, the longer the holding period of the company's cash, but you need to be careful not to delay payment. This may result in loss of discounts and reliability.