• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Finance and Foundings in Tourism Industry

Extracts from this document...

Introduction

Finance and Funding in the Travel and Tourism Industry Group assignment Klebanovska Victoria, Zonova Anna TT 1 Alpine Centre 2009 Contents Introduction..................................................................................................................1 Analyses of financial statements..................................................................................1 The Balance Sheet........................................................................................................1 The Income Statement..................................................................................................3 Cash Flow Statement....................................................................................................3 The Statement of Owners Equity..................................................................................4 Conclusion...................................................................................................................5 References...................................................................................................................6 Introduction We are working in a consulting company for a travel and tourism industry. Our boss has provide us with the latest income statement of the organization in order for us to analyze its financial performance. To analyze the financial performance of the company the income statement is not enough, so we need to make a research for extra financial statements which can help us to complete our report. The basic purpose of financial statements is to assist users in evaluating the financial position, profitability, and future prospects of a business. Being able to understand financial statements does not necessary mean to be able to prepare them. To prepare a set of statements primarily a balance sheet and incomes statement, then we have advantage of being able to analyze the information in greater depth and, therefore, use it to enhance the results of a business operation. We need financial information to make rational decisions for the immediate or near future. The financial statements are sources of required information. Smart investors have always known that financial statements are the keys to every company. ...read more.

Middle

By category, each individual account, by name and its numerical balance, is shown at the end of a specific date, which is normally the ending date of an operating period. The income statement An income statement is a one-page financial statement which summarizes the profitability of the business entity over a specified period of time. The income statement shows how much revenue and profit a company has generated over a certain period. It also shows the net profit of loss incurred over a specific financial period, typically over a fiscal quarter or a year. Neither statement is better than the other - rather the financial statements are build to be used together to present a complete picture of a company's finances (Investopedia, Balance sheet, 2009). The purpose of the income statement is to show economic results of profit - motivated operations of a business over a specific operating period. The basic balance sheet and income statement cannot in themselves answer questions regarding cash inflows and cash outflows that have occurred during an operating period. Cash flow statement In financial accounting, a cash flow statement or statement of cash flows is a financial statement that shows a company's flow of cash. The money coming into the business is called cash inflow, and money going out from the business is called cash outflow. ...read more.

Conclusion

(Small Business guide, Statement of Changes in Equity, 2009) Most "outside" decisions makers use financial statements in making investment decisions - that is, selecting those companies in which they will invest resources or to which they will extend credit. Two factors of concern to creditors and investors are the solvency and profitability of a business organizations. Investors as well as creditors interested in the solvency of a business organization, but they are even more interested in its profitability. (Meigs&Meigs) Conclusion It is necessary to understand and analyze the financial statements of the company to see the financial situation: liquidity, current assets, liabilities, equity. Also, financial statements show efficiency of the business and profitability or loss.The managers of the companies should keep a database of a company's financial statements for the last five years and, separately, the last 12 quarters. Include the Cash Flow Statement, Balance Sheet, and Income Statement. By reviewing trends in the financial statements, you will have a broader understanding of the company's: * Financial health * Profitability * Cash balance and cash flow generation * Debt levels * Asset financing With this spreadsheet, you can then easily add calculations, determine ratios, and develop a benchmark of the company's performance and financial condition against its competitors. Maintain a separate spreadsheet for each company analyzed. Doing so will build a better picture of the company and its historical performance. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Markets & Managing the Economy section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Markets & Managing the Economy essays

  1. Explain what you understand by the Private Finance Initiative - Evaluate how successful it ...

    In 1993, the Tories pioneered the Private Finance Initiative (PFI) scheme. This involved cash raised by the private sector to build new public infrastructure. Not only did they bring in cash, but for ambiguous Treasury reasons, the cash didn't count against public borrowing, so it seemed as though public expenditure stayed low.

  2. The Importance of the Canadian Airline Industry.

    Federally run Trans-Canada Airlines (TCA) began operations in 1937 under the direction of Clarence Decatur Howe, whose "business experience, intelligence, energy and toughness all helped him in the challenging task of developing a national airline" (Goldenberg 4). Howe wanted both the government and private enterprise to control the airline, especially for investment purposes.

  1. Herd Behavior in Financial Markets

    However, this does not always lead to success. Those decisions are based on the sources they have and the sources are Sanctions upon deviants - dictators put their rivals in the prison (opposition is not allowed) Preference interactions - some people are wearing Burberry coats just because the majority is

  2. TransEcon has been commissioned to conduct a research study into the strategic issues facing ...

    The private rail companies are heavily subsidised but much of the investment has not gone into regeneration or modernisation. However, the government has resisted public pressure to return the network to the public sector.2 3. Structure of the rail industry The UK rail industry is made up of a number

  1. Australian Stock Exchange

    they will sell their shares for more than they paid ft them. Such profits are called capital gains. In the decade to June 2007, the total share market value of Australian companies listed on the ASX grew by an average 13 per cent per year to $1.6 trillion.

  2. Economics Report on Budget

    A lot of people use public services and the most they use is NHS. Most people think that last year's budget did not benefit them and rated it bad overall. I could not find information from secondary research as there was insufficient amount of data available to me that I can use in this report.

  1. The Rail Industry.

    This was achieved by breaking the functions of the board down into over 100 elements. Each of these parts could be sold or franchised through the Office of Passenger Rail Franchising (OPRAF) by a process of competitive tendering. In 1994 Railtrack took control of the infrastructure such as track signalling and stations and was privatised in 1996.

  2. Economy and how it affects my business selling tables

    and cost of raw materials, therefore to keep up with my demand I will have to pay more for the costs as I was paying previously, when inflation was stable. If the value of the currency was to become weaker I will have to pay more for less in my production costs.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work