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Index

A Allocations
Accounting concept Departments 84
Definition 3 Discussion 71
Key term 3 Key term 87
Using in operations 24 Annual operating budget
Accounting department Characteristics 232
Discussion 51 Definition 230, 232
Organization chart 52 Discussion 231
Accounting period Key term 244
Discussion 61 Asset
Accounts payable Current 12
Definition 53, 92 Definition 93
Discussion 53 Fundamental Accounting Equation 11
Key term 65, 108 Key term 108, 277
Accounts receivable Kiyosaki definition 268
Definition 54, 91 Liquid 103
Discussion 54 Long term 12
Key term 65, 108 Non liquid 103
Accrued liabilities Assistant Controller
Definition 93 Discussion 53
Activity ratio Key term 65
Definition 163 Organization chart 52
Examples 163 Responsibilities 53
Adjusted gross operating profit Attest
Discussion 22 In Corporate Annual Reports 250
Formula 22 Key term 263
Advance deposits Senior officers 253
Definition 92 Audit opinion
Ageing Discussion 251
Managing 54 Key term 262

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INDEX

Average rate Capital expenditure budget


Formula 25, 164 Characteristics
Room revenue analysis 164 Definition 230, 240
Discussion 233
B Funding 242
Balance sheet Key term 242
Definition 12, 90 Preparing 241
Differences to P&L 100 Capitalization
Discussion 95 Company financing 12
Characteristics 12, 91, 107 Definition 91
Example 94 Discussion 97
Key term 24, 108 Key term 24
Personal 268 Three activities 97
Purpose of 90 Capture rate
Similarities with P&L 101 Room service forecasting 262
Bank loan Cash
Definition 93 Definition 91
Benefits Key term 109
Health benefits for employees Cash equivalent
274 Definition 103
Key term 277 Cash flow
Board of Directors Classifications 13, 104
Definition 251 Definition 13
Key term 263 Discussion 102
Booking pace Personal 26
Discussion 143 Certified Public Accountant
Key term 150 And Corporate Annual Reports
Yield management 143 250
Brand Audit opinion 250
In Corporate Annual Reports Key term 263
Key term 263 Change
Budget Discussion 32
Definition 31 Evaluating company performance
Key term 42 139
Business Operating Cycle Key term 42
Diagram 96 Measuring 32
Discussion 99 Units, dollars, percentages 32
Working capital 99 Classification of cash flow
Discussion 104
C Key term 109
Capital The three classifications 13, 104
Definition 97 Common stock
Discussion 97 Definition 93

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INDEX

Comp unit Corporate rate


Definition 254 Definition 142
Key term 263 Cost Management Index
Company contribution Discussion 128
Discussion 274 Key term 132
Key term 277 Retention and flow thru
Comparison 128
Key term 42 Current asset
Numbers to give them meaning 159 Definition 91
Competition Key term 108
Primary 167 Working capital 96
Secondary 167 Current liability
Competitive set Definition 92
And Revpar 139 Working capital 96
Definition 168 Key term 108
Key term 171 Current ratio
STAR Market Reports 167 Definition 104
Concepts Example 104
In Corporate Annual Reports Liquidity 104
257
Key term 263 D
Consolidated hotel budget Daily revenue report
Characteristics 234 Discussion 114
Definition 234 Deduction from income
Key term 244 Discussion 71
Consolidated P&L Key term 87
Budget 232 Demand tracking
Definition 10 Key term 151
Discussion 69 See Yield Management
Construction budget Department budget
Definition 230 Characteristics 235
Discussion 234 Discussion 235
Key term 244 Formulas 239
Contract market segment Key term 244
Definition 19 Methods of preparing 237
Controller Preparing 236
See Director of Finance Department head
Corporate Accounting Office Definition 50
Discussion 62 Key term 65
Key term 65 Department P&L
Corporate Annual Report Definition 10
Audited 250 Discussion 21, 83
Purpose 251 Key term 87

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INDEX

Department profit Expense categories


Discussion 74 Department P&L 83
Key term 87 Four major categories 82
Depreciation Key terms 87
Definition 92 Expense center
Director of Finance Discussion 21, 71
Definition 51 Examples 21
Key term 65 Key terms 87
Organization chart 46, 52
Responsibilities 53 F
Director of Revenue Management 401K accounts
Discussion 147 Definition 274
Responsibilities 144 Key term 277
Direct report Financial analysis
Discussion 48 Definition 3
Key term 65 Key term 24
Discount room rates Measuring financial performance 29
Examples 142 Using in operations 2
Dividends Financial literacy (Kiyosaki)
Key term 277 Definition 266
Personal 271 Key term 277
Division Financial Management Cycle
In Corporate Annual Reports Discussion 29–30
257 Key term 42
Key term 263 Fiscal year
DOA—Day of arrival Corporate Annual Report 251
Discussion 143 Definition 251
Key term 151 Key term 264
Fixed expense
E Definition 22, 128
Earnings Key term 87, 132, 186
Key term 277 Examples 85, 129
Equity Consolidated P&L 73
Key term 255 Flow thru
Personal 267 Definition 128
Escrow Examples 129
Key term 244 Key term 132
Reserve 233 Forecast
Executive Committee Definition 31, 174
Discussion 50 Discussion 31, 174
Key term 65 Forecasting timeline 176
Organization chart 46 Formulas 182

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INDEX

Key term 42, 186 Key term 66


Revenue forecasts 179 Position 53
Steps in preparing 183 General Manager
Wage forecasts or schedules 184 Discussion 50
Volume, the key to forecasting Key term 66
182 Gross Operating Profit
Weekly Discussion 21, 74
Discussion 177 Formula 22
Key term 187 Four Seasons 21
Monthly/Period Hyatt 21
Discussion 178 Group market segment
Key term 186 Definition 19
Quarterly Examples 19
Key term 186
Restaurant forecasts H
Examples 202, 204 Historical average
Problem sets 207, 209 Discussion 143
Steps in preparing 203 Key term 151
Rooms forecasts Yield Management 143
Examples 190 Hotel management reports
Problem set 199 Daily reports 113
Steps in preparing 188 Definition 112
Room service forecasts Discussion 112
Examples 202, 204 Types and uses 113
Problem sets 207, 208 Horizontal headings
Steps in preparing 202 Discussion 77
Wage forecasts Key term 87
Examples 224 House profit
Problem sets 227 Discussion 21
Steps in preparing 222 Formula 22
Fundamental Accounting Equation Key term 87
Definition 11 Management bonus
Discussion 93 Marriott 21
Formula 91
I
G Income accounting
GAAP—Generally Accepted Accounting Key term 66
Principles Income journal
Corporate Annual Reports 251 Definition 53
Discussion 94 Discussion 53
General Cashier Income Statement
Discussion 58 See P&L Statement

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INDEX

Incremental Statement of cash flow 13


Discussion 128 Key term 24
Key term 132 Liquidity ratios
Independent Audit Report Definition 163
Audit opinion example 252 Examples 163
In Corporate Annual Report 252 Long term asset
Key term 264 Definition 92
Interest Key term 108
Key term 277 Non liquid 103
On personal investments 27 Long term liability
Inventory Definition 93
Definition 92 Key term 109
Key term 109
Investment factors M
Definition 73 Management Responsibility Report
Key term 87 Discussion 261
Key term 264
L Management tool
Last year Numbers used as 29
Key term 42 Manhours
Lease Discussion 123
Definition 93 Formulas 123
Liabilities Labor productivity reports 123
Definition 93 Market capitalization
Key term 109 Definition 3
Kiyosaki’s definition 268 Formula 25
Current Key term 24
Definition 92 Market segment
Key term 109 Definition 8, 18
Long-term Examples 19
Definition 103 Contract 19
Key term 109 Group 19
Liability(Kiyosaki) Transient 19
Definition 268 Key term 24
Key term 277 Market share
Line manager Key term 171
Definition 51 Message to shareholders
Key term 66 Discussion 254
Line of credit
Definition 93 N
Liquidity Net house profit
Definition 13, 97 Discussion 22, 75
Discussion 97, 102 Formula 22

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INDEX

Key term 87 Percentage


Management tool 29 Department profit 156
Measuring financial performance 29 Discussion 34, 159
Net worth Formula 43
Key term 278 Key term 42
Individual or personal 267 Four types used in financial analysis 35–38
Night Audit Change
Discussion 54 Discussion 37
Key term 66 Formula 38, 43
Responsibilities 54 Key term 42
Notes to consolidated financial statements Cost
Key term 264 Discussion 35
Numbers Formula 35, 43
Financial language 23 Key term 42
To measure financial performance 23 Mix
Management tool 23 Discussion 36
Comparing to give them meaning 159 Examples 36, 37
Formula 36, 43
O Key term 42
Occupancy percentage Profit
Discussion 164 Discussion 20, 36
Formula 25 Formula 5, 36, 43
Offset rooms Key term 42
Housekeeping wage schedules Point of sale system (POS)
222 Key term 25
Operating department Recording sales 13
Definition 50 Reports 17
Key term 66 Sales transactions 15
Operating ratios Pre-opening budget
Definition 162 Characteristics 233
Examples 162 Definition 230
Organization chart Discussion 233
Accounting department 52 Key term 244
Definition 48 Pre-paid expense
Hotel 49 Definition 92
Key term 66 Primary competition
Owner equity Key term 171
Definition 93 Principle
Key term 109 Importance of in personal finance 271
Key term 278
P Productivities
Paid in capital Labor 123
Definition 93 Profit 123

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INDEX

Profit Public relations


Best measure of financial performance 155 In Corporate Annual Report 252
Definition 20, 154 Key term 264
Department 21, 74, 156
Examples 156 R
Hotel 155 Rat race
Formula 5, 17, 25, 43, 155 Kiyosaki’s definition 271
Key term 25 Rate
Profitability discussion 155 Definition 16
Retention and flow thru 127 Key term 25
Profit and Loss Statement Rack rate 141
Characteristics 10 Rate structure
Critiques Discussion 141
Definition 10 Establishing 141
Differences to Balance Sheet 100 Examples 142
Horizontal headings 77 Key term 151
Key term 25 Market segments 141
Personal 267 Ratios
Similarities with Balance Sheet 101 Activity ratios 162
Title 75 Analyzing revenues 163
Vertical headings 77 Discussion 162
Profit after taxes Key term 171, 186
Discussion 75 Liquidity ratios 163
Key term 87 Operating ratios 162
Profit before taxes Profitability ratios 163
Discussion 75 Solvency ratios 163
Key term 88 Used in forecasting 184
Profit center Reserve
Discussion 69 Key term 244
Examples 21 Retained earnings
Key term 88 Definition 93
Profitability ratios Retention
Definition 163 Discussion 127
Examples 163 Examples 129
Pro forma Key term 133
Discussion 31 Same as flow thru
Key term 42 Retirement accounts
Property Company 401K 274
Key term 25 Company contributions 274
Property, plant and equipment (PPE) Retirement planning
Capitalization 240 Planning for 275
Definition 92 Revenue
Key term 244 Beginning of financial performance 15

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INDEX

Calculating room revenue 16 Solvency ratios


Calculating restaurant revenue 16 Definition 163
Discussion 15–16 Examples 163
Key term 25 Source and Use of Funds Statement
Variation analysis 164 As part of Statement of Cash
Revenue management systems Flows
Definition 143 Definition 13
Revenue center Discussion 105
Discussion 69 Key term 109, 151
Examples 21 Special corporate rate
Key term 88 Definition 142
REVPAR STAR Market Report
Characteristics 137 Discussion 167
Definition 15, 136 Example 168
Examples 137 Key term 171
Formula 16, 18, 25, 136 Staff department
Importance of 138 Definition 50
Key term 25, 151, 171 Key term 66
To measure room revenue performance Statement of Cash Flows
18 Characteristics 13, 101
Uses 139 Definition 13, 101
Rich Dad, Poor Dad Discussion 101
Six lessons for financial freedom 272 Key term 25, 109
Room rate structure
Example 19 T
Rooms sold Taxes payable
Room revenue analysis 164 Definition 92
Titles
S Key term 88
Sales P&L Statement 75
See revenue Total department profit
Secondary competition Key term 88
Key term 171 Transient market segment
Securities and Exchange Commission (SEC) Examples 19
Discussion 251 Trends
Key term 264 And variation analysis 160
Selling strategy Company and industry 40
Committee 147 Discussion 39
Definition 147 General economic 40
Discussion 147 Key term 42
Examples 147 Revenue, expense and profits
Key term 151 40
Yield Management 144 Short and long term 39

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INDEX

V Wages payable
Variable Definition 92
Definition 161 Wage scheduling
Examples 162 Discussion 222
Variable expense Examples 224
Definition 128 Problem sets 227
Example 129 Weekly management reports
Key term 133, 186 Discussion 125
Wages as a variable expense 179 Working capital
Variation Daily operations 12
Definition 128 Definition 91
Key term 133 Discussion 96
Variation analysis Examples 104
Discussion 159, 161 Formula 25
Examples of room revenue variation 165 Key term 25
Expense variation analysis 166 Liquiditity measures 104
Formulas 162 Managing 99
Profit variation analysis 165 Trends 104
Ratios 162
Using Foundations of Financial Analysis 159 Y
Vertical headings Yield Management
Discussion 77 Critiques 149
Key term 88 Definition 136
Volume Discussion 143
Definition 15 Examples 143
Key term 186 Key term 151
Occupancy percentage discussion 164 Selling strategy 144
The key to forecasting 182 Using 145

W
Wage cost percentage
Discussion 124
Formula 124

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