NEW YORK CITY COLLEGE OF TECHNOLOGY, CUNY DEPARTMENT OF HOSPITALITY MANAGEMENT COURSE OUTLINE CLASS HOURS: 3 LAB HOURS: 0 CREDITS: 3

Transcription

1 NEW YORK CITY COLLEGE OF TECHNOLOGY, CUNY DEPARTMENT OF HOSPITALITY MANAGEMENT COURSE OUTLINE COURSE: HMGT 3602 COURSE TITLE: HOSPITALITY MANAGEMENT ACCOUNTING AND FINANCE CLASS HOURS: 3 LAB HOURS: 0 CREDITS: 3 1. COURSE DESCRIPTION The needs of management and the application of accounting concepts to managerial and financial decision making, methods, and planning; analysis of financial statements, preparing operating and capital budget analysis; principles, and techniques for managing cash reserves, and other ethical and current management accounting and financial management issues. 2. COURSE OBJECTIVES Upon completion of HMGT 3602, the student will be able to a. Describe the major accounting categories on the statement of income, the balance sheet, and statement of retained earnings. b. Apply and interpret management and financial accounting information from financial statements c. Distinguish direct and indirect costs, fixed, and variable costs, and discretionary costs as found in hospitality businesses d. Utilize Cost Volume Profit analysis to calculate break even point as well as examine the effect of cost and price changes e. Explain budgeting process management 3. STUDENT LEARNING OUTCOMES and ASSESSMENT Student Learning Outcomes a. Articulate management and financial accounting information communicated via financial statements and reports (HMGT: Knowledge, Gen Ed: Skills, Inquiry/Analysis) b. Develop and evaluate comparative financial statements (HMGT: Knowledge, Gen Ed: Skills, Inquiry/Analysis) c. Identify and interpret various costs found in hospitality businesses (HMGT: Knowledge, Gen Ed: Skills, Inquiry/Analysis) d. Construct and assess Cost Volume Profit analysis (HMGT: Knowledge, Gen Ed: Skills, Inquiry/Analysis) e. Organize a budget and justify the operational budgeting processes (HMGT: Knowledge, Gen Ed: Skills, Inquiry/Analysis) Method of Assessment

2 4. PREREQUISITES 5. TEXT HMGT 2302 Jagels, M. G. (2007). Hospitality management accounting (9 th ed.). Hoboken, NJ: John Wiley & Sons, Inc. 6. GRADING SYSTEM Quizzes 25 % Homework and Case Studies 30 % Midterm Exam 15 % Final Exam 30 % Total 100%

3 WEEKLY COURSE OUTLINE COURSE: HMGT 3602 COURSE TITLE: HOSPITALITY MANAGEMENT ACCOUNTING AND FINANCE WEEK 1 Review of accounting The rules of accounting The balance sheet Accounts and the accounting cycle WEEK 2 Understanding financial statements The income statement The balance sheet WEEK 3 Analysis and interpretation of financial statements Comparative balance sheets and common-size balance sheets Comparative income statements and common-size income statements Average check, cost, and income per guest Trend results WEEK 4 Ratio analysis Current liquidity ratios Long-term solvency ratios Profitability ratios Turnover ratios Operating ratios Leverage WEEK 5 Midterm exam WEEK 6 Bottom-up approach to pricing Restaurant pricing Room rates Room rate discounting WEEK 7 Cost management Types of costs Allocating indirect cost to revenue areas Which piece of equipment to buy Selling below cost Closing during off-season

4 WEEK 8 Cost-volume-profit approach to decisions Assumptions and limitations Graphical presentation The CVP formula WEEK 9 Budgeting Type of budgets Budget preparation and budget cycle Departmental budgets Budgeting in a new operation WEEK 10 Working capital Statement of source and use of working capital Usefulness of statement Compilation of statement of source and use of working capital WEEK 11 Cash management The cycle of cash flow Income and expense budgets Preparing the cash budget Long-range cash flow WEEK 12 Investment decision Average rate of return Payback period Discounted cash flow Net present value Internal rate of return Own or lease equipment WEEK 13 Financial goals and information systems Objectives of financial management Information systems WEEK 14 Feasibility studies Twelve-month average occupancy rate Growth rate of demand Additional room requirements Future supply of room requirements Calculations of: capital investment, pro forma statements, cash flow projections, property evaluation WEEK 15 Final examination

5 WEEKLY COURSE OBJECTIVES COURSE: HMGT 3602 COURSE TITLE: HOSPITALITY MANAGEMENT ACCOUNTING AND FINANCE The student will be able to... WEEK 1 Define and discuss the key accounting principles and concepts List the four methods of depreciation illustrated in the text Explain the balance sheet equation Post transactions to T - accounts Complete working papers WEEK 2 Explain the main purpose of financial statements and the value of a uniform system of accounts Define and explain the difference between and income statement and a balance sheet Describe the difference between direct and indirect or undistributed expenses, and give examples Prepare income statements in proper format, calculate net food cost, and discuss the concept of responsibility accounting List the six major classifications of accounts that could appear on a balance sheet and give examples of the type of accounts that could appear in each classification Prepare a balance sheet according to account category WEEK 3 Describe comparative analysis and use it for balance sheet and income statement analysis Describe comparative common-size analysis and use it for balance sheet and income statement analysis Calculate average sale, average cost, and average income per quest WEEK 4 Describe the four ways in which a ratio can be expressed Briefly explain and use each of the ratios illustrated Interpret the results after using each of the ratios, stating how a creditor, an owner, and management may view it from each of their perspectives Differentiate between net income and profitability List and briefly describe the use of some of the various operating ratios common to the hospitality industry Explain how leverage works in financing WEEK 5 Pass midterm exam WEEK 6 Briefly define and give examples of some of the major types of cost such as direct and indirect costs, fixed and variable costs, and discretionary costs Prorate indirect costs to revenue departments and make decisions on the results Use relevant costs to help determine and make decisions, such as to close or not during the offseason

6 Define "high operating leverage" and explain its advantages and disadvantages WEEK 7 Briefly define some of the assumptions and limitations inherent in CVP analysis. Prepare and use a graph, given information about sales and fixed and variable costs WEEK 8 State the CVP equation for determining sales level in dollars, and in units. Explain the term contribution margin WEEK 9 Explain the concept of budgeting. Define the three purposes of budgeting Define the types of budgets, such as fixed, departmental, capital, and flexible. Briefly discuss the advantages and disadvantages of budgeting. Explain what information is required to determine budget revenue in a restaurant operation, and budget revenue in the rooms department of a hotel or motel. Prepare a budget (pro forma) income statement given appropriate information about estimated revenue and costs WEEK 10 Define working capital. List and briefly explain some of the source and some of the use of working capital. Prepare a statement of source and use of working capital, given appropriate information. Prepare a statement of changes in working capital, given appropriate information. Explain why net income and cash on hand are not necessarily synonymous WEEK 11 Explain why cash planning is necessary and state the two main purposes of cash budgeting Explain why net income on an income statement is not necessarily indicative of the amount of cash on hand Prepare cash budget given appropriate information. Define bank float Prepare a schedule of aging of account receivable Calculate inventory turnover WEEK 12 Explain how average rate of return is calculated, using the ROI equation Explain the major advantages and disadvantages of using average rate of return Give the equation for the payback period, use the equation, and state the pros and cons of this method Discuss the concept of the time value of money, and explain the term "discounted cash flow" Use discounted cash flow tables in conjunction with net present value method to make investment decisions Solve problems relating to the purchase verses the rental of fixed assets

7 WEEK 13 Discuss the role of mission statements with reference to financial goals. Discuss the concepts of financial management and list the types of financial and other goals that a company might have. Discuss the pros and cons of wealth maximization as a financial goal. Define Management by objective. Define management by exception WEEK 14 Discuss "Feasibility Studies" Discuss the value of a feasibility study List and briefly discuss the four steps in hotel room supply and demand analysis Calculate forecast rooms requirements from demand information Prepare pro forma income statements for room, food, and beverages from given information. Convert pro forma income statements to cash flow Evaluate the financial analysis projections of feasibility studies WEEK 15 Pass final examination

8 SELECTED BIBLIOGRAPHY Accounting History Page (ND). Retrieved 2012, from Accounting (2010). Retrieved 2012, from Bilgihan, A., Okumus, F., Nusair, K., & Kwun, D. J. (2011). Information technology applications and competitive advantage in hotel companies. Journal of Hospitality and Tourism Technology, 2(2), Choo, F., & Tan, K. B. (2011). An income statement teaching approach for cost-volume-profit (CVP) analysis by using a company s CVP model. Accounting and Finance, 11(4), Corgel, J., & Woodworth, M. (2012). Why hotels? Economy weakens but hotels remain relatively strong--- What gives? What might give? Cornell Hospitality Quarterly, 53(4), Chouliaras, V. (2012). Analyzing income statement of 3 star hotel in Thessaloniki. Tourism and Hospitality Management, 18(1), Edwards, J. S. A., & Ingram, H. (1995). Food, beverage and accommodation: An integrated approach. International Journal of Contemporary Hospitality Management, 7(5), How to study and write for accounting (2012). Retrieved 2012, from Jones, T. A. (2008). Changes in hotel industry budgetary practice. International Journal of Contemporary Hospitality Management, 20(4), Mihailovi, I., Randelovic, D., & Stojanovic, D. (2010). Accounting information as resource for business decisioning. Tourism & Hospitality Management, Rutgers Accounting Web (2012). Retrieved 2012, from Schmidgall, R. S., Borchgrevink, C.P., & Zahl-Begnum, O.H. (1996). Operations budgeting practices of lodging firms in the United States and Scandinavia. International Journal of Hospitality Management, 15(2), Turner, M. J., & Guilding, C. (2010). Accounting for the furniture, fittings & equipment reserve in hotels. Accounting & Finance, 50(4),