module specification

This module, Managing Financial Resources in the Hospitality Industry (Module code LT5F22GN) introduces students to methods, theories and techniques related to financial and management accounting.  Students can analyse and evaluate quantitative information on hospitality organisations and demonstrate competencies in exercising judgement about the performance at various levels within the organisations.

The module is delivered over 15 weeks through a series of interactive teaching sessions with an emphasis on group participation activities using case studies, in-class oral presentation and software packages.

The module aims to:
• Encourage students to identify the purposes and structure of various financial statements and develop the ability to understand accounting information in the context of accounting principles and standards.
• Enable the student to access and interpret published financial statements of various hospitality organisations using suitable tools and techniques relevant to business decisions supported with various sources of finance.
• Encourage students to use key performance indicators and budgets to evaluate the performance of the hospitality business using both financial and non-financial data.

• Introduction to basic accounting
• the purpose of financial statements in profit and non profit organisations
• Types of financial statements & interpreting financial statements
• Type of stakeholders & their various information needs
• Cost classification & calculation of unit cost per unit
• Budget & budgeting decisions
• Variance analysis for making decisions
• Room performance indicator: Room occupancy percentage calculation, average daily room rate (ADR) calculation and RevPAR calculation.
• Food and beverage performance indicator: Food cost of sales ratio, Beverage cost of sales, Food average spend and Beverage average spend.

The module is delivered through a series of interactive teaching sessions with an emphasis on group participation sessions using case studies, and software packages. The module will be assessed through the individual course work and open book examination.

The lectures will aim to focus on the theoretical knowledge and understanding of accounting conceptual framework and different sources of finance for the hospitality business .In addition the learning process will also focus on the analysis and interpretation of the financial statements with the budget preparation.

To complete the coursework, students are expected to conduct desktop research on the financial statements of an organisation operating within the hospitality industry. The students are encouraged to establish contacts with the organisations that they have chosen and discuss issues which may enhance the quality and findings of the report.

At the end of this module the students will be expected to be able to:
1. Understand the financial statements and interpret the financial performance of a hospitality organisation using ratio analysis.
2. Evaluate the information needs of different stakeholders.
3. Demonstrate understanding of the use of cost information, room performance indicators, food and beverage performance indicators.
4. Analyse a hospitality organisation’s budget by using variance analyses.

Core textbooks:
• American Hotel & Lodging Educational Institute, (2014), Uniform System of accounts for the lodging industries: Hospitality Accounting/Financial management. 11th ed., New York:  American Hotel & Lodging Educational Institute.
•   Elliott, B. and Elliot, J., (2013), Financial Accounting and Reporting, 16th ed, Harlow: Pearson

Recommended textbooks:
• Atrill, P., and Mclaney, E.J., (2012), Management Accounting for Decision Makers. 7th ed., London: FT/Prentice Hall
• Moncarz, E.S., (2003), Accounting for Hospitality Industry. New York: Prentice Hall
• Guilding, C., (2014), Accounting Essentials for Hospitality Managers Hospitality, Leisure and Tourism. 3rd ed., Oxon: Routledge