Ratios

Key ratios in assessing the financial performance of hotel companies

Introduction:

What is Managerial Accounting?

“MANAGEMENT ACCOUNTANCY is the presentation information- collected, analyzed and interpreted through a coherent system involving the methods and techniques used in financial accounting, costing, budgetary control, mathematics and statistics- to management for helping it in reaching its objective of profit-maximization commensurate with financial stability and social justice through the different management functions and co-ordination processes of planning, motivation and control, decisions, organizing, delegation and communication.” Management on a whole has always needed help from accounting to keep its functioning smooth so as to keep its data updated. To be specific, management accountancy presents accounting information in such a way that it may be of help in formulating management policy and controlling operations.

Functions of management accounts:

Management functions can be broadly divided into four sections:

* Planning means determinations to achieve the means, objectives and targets. The plans are drawn out on the basis of the objectives and policies. It lays down the procedures and programs in all phases like the methods to be followed and the course of action to be adhered to. Planning also depends on the history, therefore, the past events are analyzed and significant events are traced out, figure is projected and then is the plan based. Also, the success of the plan depends on the ability to forecast activity with reasonable correctness, flexibility and devotion in implementation as also on constant review and revision of the plan itself. Planning is considered to be one of the very important functions of top management.

* Co-ordination is vital not only in the implementation of work but also achieve the above mentioned. Co-ordination is maintained mainly through communication process. For proper co-ordination...