| income statement | Most analysts start their analysis of financial statements with the |
| TRUE | Estimations have to be made in an adequate manner which increases earning capacity of enterprise. |
| TRUE | The finance manager has to decide to allocate funds into profitable ventures so that there is safety on investment and regular returns is possible. |
| Peak and weak seasons | cause the fluctuation in tourists and visitor numbers to a destination. This is the reason, sometimes hoteliers need to change or completely revamp their room pricing strategies to earn a profit. |
| break‐even point | represents the level of sales where net income equals zero. |
| Pricing based on your repeat guests | You can email to all your guests with some discount on vacation tours or offers to stay for 2 nights with a lower rate package on their birthdays/anniversaries on booking directly with the hotel. |
| vertical" analysis | The correct answer is: With this method of analysis of financial statements, we will look up and down the income statement to see how every line item compares to revenue, as a percentage. |
| TRUE | You can encourage guests to pay slightly more for a better room () with better facilities. |
| TRUE | measures how well a company performs in generating a profit. Click the following links for a thorough review of each ratio. |
| contribution margin ratio | it is calculated by dividing the contribution margin by the sales or revenues amount. |
| TRUE | In the ever-evolving global economy, the key to an effective revenue management strategy is to adopt a systematic approach to pricing. |
| TRUE | Cash Equivalents are also lumped under this line item and include assets that have short-term maturities under three months or assets that the company can liquidate on short notice, |
| Delphi | This method was invented by Olaf Helmer and Norman Dalkey of the Rand Corporation in the 1950s for the purpose of addressing a specific military problem. |
| Cash Flow Statement | shows how much cash is generated and used during a given time period |
| Cross-selling | has now become popular and excites customers to make additional purchases apart from the one they already booked in advance. |
| TRUE | involves short- term and long- term debt equity analysis. |
| current liabilities | are all the debts and expenses the company expects to pay within a year or one business cycle, whichever is less. |
| FALSE | Check is required for many purposes like payment of wages and salaries, payment of electricity and water bills, payment to creditors, meeting current liabilities, maintainance of enough stock, purchase of raw materials, etc. |
| Leverage ratios | These ratios reveal the extent to which a company is relying upon debt to fund its operations, and its ability to pay back the debt. Click the following links for a thorough review of each ratio. |
| disaggregate market models | separating off different segments of a complex market for individual study and consideration |
| TRUE | A finance manager has to make estimation with regards to capital requirements of the company. |
| TRUE | Estimations have to be made in an adequate manner which increases earning capacity of enterprise. |
| Rate of Return Method | In this method, average annual net income (after tax and depreciation deductions) is expressed as percentage of capital investment. |
| Assess the quality of the firm's financial statements. | There are generally six steps to developing an effective analysis of financial statements. The third step is: |
| TRUE | if you don't want to lose your customers and competition in the market, it is necessary to set a pricing strategy to increase overall profitability of the business. |
| TRUE | Working capital is also known as net working capital (NWC) |
| quantitative method of forecasting | This a mathematical process, making it consistent and objective |
| Activity ratios | These ratios are a strong indicator of the quality of management, since they reveal how well management is utilizing company resources. Click the following links for a thorough review of each ratio. |
| segments | To build an effective , it is necessary to understand the different market . |
| Pricing based on the upselling | In this, you can offer the "upgrade" options to the guests while they're making a choice of a hotel room. |
| Return Of Investments | Whenever there is a demand, you can increase your room rates for more business ROI. ROI stands for: |
| Cost-volume-profit (CVP) analysis | is used to determine how changes in costs and volume affect a company's operating income and net income. |
| causal model | is the most sophisticated kind of forecasting tool. It expresses mathematically the relevant causal relationships, and may include pipeline considerations (i.e., inventories) and market survey information. |
| horizontal analysis | With this analysis , we look across the income statement at the year-over-year (YoY) change in each line item. |
| FALSE | To attract repeat guests and earn revenue through them, you dont need to apply a proper pricing strategy. |
| minus | The standard formula for working capital is current assets current liabilities. |
| Present Worth Method | This method is more accurate and reasonable and is used to evaluate the present value of new equipment. |
| Machinery and Allied Products Institute | This is a new method and was developed by George Teborgh, the director of this institute. |
| Know your target audience | One of the steps which are necessary to consider to create a proper pricing strategy for your hotel is |
| contribution margin | represents the amount of income or profit the company made before deducting its fixed costs |
| TRUE | Unidentifiable intangible assets include brand and goodwill. |
| TRUE | A finance manager has to make estimation with regards to capital requirements of the company. |
| TRUE | involves short- term and long- term debt equity analysis. |
| TRUE | Property, Plant, and Equipment (also known as PP&E) capture the company's tangible fixed assets. |
| FALSE | Horizontal analysis looks at the vertical affects line items have on other parts of the business and also the business's proportions. |
| Seasonal subseries plots | alternative plot that emphasises the seasonal patterns is where the data for each season are collected together in separate mini time plots. |
| TRUE | Financial Management means applying general management principles to financial resources of the enterprise. |
| shareholders' equity | The balance sheet is a report of a company's financial worth in terms of book value. It is broken into three parts to include a company's assets, liabilities and . |
| product differences measurement. | compare a proposed product with competitors' present and planned products, ranking it on quantitative scales for different factors. |
| sales income | Which of the following is not the main liquidity ratios for a business? |
| TRUE | The net profits decision have to be made by the finance manager. |
| current ratio | current assets divided by current liabilities |
| Pricing based on the non-refundable policy | You can offer a lower rate for a longer stay with a condition of no refund in case of cancellation (this will help you sell the room again if canceled). |
| Payback Period | This technique determines as to how long it will take (in years) to payback invested capital. |
| seasonal pattern | occurs when a time series is affected by seasonal factors such as the time of the year or the day of the week. |
| Occupancy based | This pricing strategy is the best way if you want to increase room revenue. You can set the pricing of your hotel rooms based on the demand and supply. |
| projected | The financial statements of a company record important financial data on every aspect of a business's activities. As such they can be evaluated on the basis of past, current, and performance. |
| TRUE | Inventory includes amounts for raw materials, work-in-progress goods,and finished goods. |
| liquidity | Working capital is a measure of a company's ________________, operational efficiency and its short-term financial health. |
| revenue | Though it is surprising, a well-planned non-refundable cancellation policy can help you increase your . |
| FALSE | Accounts Receivables, is the amount a company owes suppliers for items or services purchased on credit. |
| Cost control | It is the practice of identifying and reducing business expenses to increase profits, and it starts with the process. |
| exponential smoothing methods | are weighted averages of past observations, with the weights decaying exponentially as the observations get older. |
| TRUE | All PP&E is depreciable except for Land. |
| FALSE | Check is required for many purposes like payment of wages and salaries, payment of electricity and water bills, payment to creditors, meeting current liabilities, maintainance of enough stock, purchase of raw materials,etc. |
| TRUE | Inventory includes amounts for raw materials, work-in-progress goods, and finished goods. |
| TRUE | This account includes the balance of all sales revenue still on credit, net of any allowances for doubtful accounts (which generates a bad debt expense). As companies recover accounts receivables, this account decreases and cash increases by the same amount |
| FALSE | Marketing manager has to make decisions with regards to cash management. |
| Upselling | is beneficial during the booking process. In this, you can offer the "upgrade" options to the guests while they're making a choice of a hotel room. |
| qualitative forecasting | Otherwise known as the judgmental method, offers subjective results, as it is comprised of personal judgments by experts or forecasters. |
| Pricing based on the market competition | you constantly need to monitor your competitors' room rates and understand their pricing strategy |
| Pricing based on your guest type | You can sell the same room at a different price for different guests. |
| guests are offered one simple rate for their entire stay based on their arrival date and total reservation night length. | An advantage of the length of stay pricing is that: |
| TRUE | Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. |
| Creditors | Anyone who has lent funds to a company is interested in its ability to pay back the debt, and so will focus on various measures. |
| FALSE | Marketing manager has to make decisions with regards to cash management. |
| TRUE | Dividend declaration includes identifying the rate of dividends and other benefits like bonus. |
| primary sources | takes time to gather because it is first-hand information, also considered the most reliable and trustworthy sort of information. |
| FALSE | Accounts Receivables, is the amount a company owes suppliers for items or services purchased on credit. |
| TRUE | The finance manager has to decide to allocate funds into profitable ventures so that there is safety on investment and regular returns is possible. |
| TRUE | Financial statement analysis is used by internal and external stakeholders to evaluate business performance and value. |
| target net income | Sales - fixed costs - variable costs = |
| ratio analysis | Several techniques are commonly used as part of financial statement analysis. Three of the most important techniques include , , and . |
| cycle occurs | when the data exhibit rises and falls that are not of a fixed frequency. |
| FALSE | Liabilities is most liquid of all assets, cash, appears on the first line of the balance sheet. |
| TRUE | This line item is noted net of depreciation. Some companies will class out their PP&E by the different types of assets, such as Land, Building, and various types of Equipment. |
| Occupancy based pricing strategy | is the best way if you want to increase room revenue. You can set the pricing of your hotel rooms based on the demand and supply. |
| TRUE | This account includes the balance of all sales revenue still on credit, net of any allowances for doubtful accounts (which generates a bad debt expense). As companies recover accounts receivables, this account decreases and cash increases by the same amount |
| balance sheet | displays the company's total assets, and how these assets are financed, through either debt or equity |
| Working capital | It represents a company's ability to pay its current liabilities with its current assets. |
| Forecasting | refers to the practice of predicting what will happen in the future by taking into consideration events in the past and present. |
| FALSE | A company has negative working capital If the ratio of current assets to liabilities is higher than one. |
| Forecasting by analogy | A common example is the pricing of a house through an appraisal process. An appraiser estimates the market value of a house by comparing it to similar properties that have sold in the area. |
| current ratio | Working capital is calculated by using the, which is current assets divided by current liabilities |
| time series | is a set of chronologically ordered points of raw data |
| Pricing based on forecasting | is an important factor to consider for setting the price of the rooms that are available for future dates |
| TRUE | All PP&E is depreciable except for Land. |
| Budgeting | involves creating a statement that consists of numerous financial activities of a company for a specific period, such as projected revenue, expenses, cash flow, and investments |
| TRUE | During the peak season, if your 7 to 8 rooms are still unoccupied, you can increase the room rates of the same for more business profit. |
| Liquidity ratios | This is the most fundamentally important set of ratios, because they measure the ability of a company to remain in business. |
| Pricing based on the cross-selling | excites customers to make additional purchases apart from the one they already booked in advance |
| Financial statement analysis | is the process of analyzing a company's financial statement for decision-making purposes. |
| seasonal plot | is similar to a time plot except that the data are plotted against the individual "seasons" in which the data were observed. |
| laws | set regulations on hotels' activities because of which hotel room pricing is affected, leading to the controlling of prices at minimum or maximum levels |
| Working capital | assesses a company's ability to pay its current liabilities |
| TRUE | Accounts Payable may or may not be lumped together with the above account, Current Debt. While they may seem similar, the current portion of long-term debt is specifically the portion due within this year of a piece of debt that has a maturity of more than one year |
| Current Assets | This is what a company currently owns—both tangible and intangible—that it can easily turn into cash within one year or one business cycle, whichever is less. |
| income statement | how much revenue does it have, is it profitable, what are the margins like?" |
| FALSE | Accounts Receivables may or may not be lumped together with the above account, Current Debt. |
| TRUE | Unidentifiable intangible assets include brand and goodwill. |
| Regulate the forecast | This involves looking at different forecasts in the past and comparing them with the actual things that happened with the business. |
| TRUE | Property, Plant, and Equipment (also known as PP&E) capture the company's tangible fixed assets. |
| TRUE | For any financial professional, it is important to know how to effectively analyze the financial statements of a firm. |
| TRUE | The net profits decision have to be made by the finance manager. |
| TRUE | Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. |
| TRUE | Financial Management means applying general management principles to financial resources of the enterprise. |
| TRUE | Cash Equivalents are also lumped under this line item and include assets that have short-term maturities under three months or assets that the company can liquidate on short notice, |
| Cost | includes raw materials, selling and distribution overheads, cost of advertisement and sales promotion |
| TRUE | If there is no demand for the service or hotel room, it cannot be sold at all. However, different guest segments may react in a different way to price changes. |
| trend | exists when there is a long-term increase or decrease in the data. |
| Current Assets | This is what a company currently owns—both tangible and intangible—that it can easily turn into cash within one year or one business cycle whichever is less. |
| Current Liabilities | This typically includes all the normal costs of running the business such as rent, utilities, materials and supplies; interest or principal payments on debt |
