Inancial Ratios in the Hospitality Industry

Prepare a 350to 700-word analysis of Situation 9.6, Financial Ratios from Income Statements (Ch. 9) from Hospitality Management: A Capstone Course. Your word count should not include your calculations, which should be submitted at the same time as your analysis. In your financial analysis, discuss the findings from your calculations and how they effect the organization. Your analysis should be based on the calculation of the following financial ratios:
” Occupancy percentage
” Cost of labor percentage for rooms and F&B
” Cost of food sold percentage
” Cost of beverage sold percentage
” Average daily rate
” Profit margin for rooms and F&B
” Total revenue change from budget for rooms and F&B
” Housekeeping cost per occupied room
” Room sales to total sales
” Total rooms division payroll per occupied room

The financial ratios are below:

The departmental income statements given below correspond to the month of March for a 310-room hotel in Costa Mesa, California. The first statement is for the rooms division, and the second for the F&B division of the establishment. In the interest of space, the expense categories have been, in some cases, combined.

A Rooms Division Report
A Actual Budgeted
Rooms Revenue $473,979 $541,800
Total Payroll and Related
Front office 28,219 33,605
Housekeeping 48,833 57,283
Other Expenses A A
Front office 16,754 18,411
Housekeeping 9,396 15,600
Departmental Income 370,777 416,901
A F&B Report A
F&B Revenue A A
Food $220,728 $210,095
Beverage 70,578 78,706
Other income 10,882 12,000
Cost of Sales A A
Food 85,840 68,481
Beverage 16,177 17,709
Total F&B Payroll and Relate 113,439 122,692
Other Expenses 20,076 30,052
Departmental Income 66,656 61,867

Tom Vallen, assistant manager of the hotel, has been asked to calculate and interpret the following ratios: occupancy percentage; cost of labor percentage for rooms and F&B; cost of food sold percentage; cost of beverage sold percentage; average daily rate; profit margin for rooms and F&B; total revenue change from budget for rooms and F&B; housekeeping cost per occupied room; rooms sales to total sales; total rooms division payroll per occupied room. What will be the results? The number of rooms sold for the month was 7,755.