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HMGT 618
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Gravity
Terms in this set (57)
financial leverage
what is the use of debt to be invested to generate a higher return on investment than the cost of debt?
lenders and creditors
which groups generally do not like to see much debt on a company's balance sheet?
liquidity ratio
what ratio assesses the ability of the firm to pay short-term debt
solvency ratios
what ratio assesses the ability of the firm to pay long term debt
activity ratios
what ratio assesses how well management has utilized the company's assets
profitability ratios
what ratio assesses how well management has generated profits for the company's owners
investor ratios
what ratio assesses the performance of earnings and stocks of a company
maximizing sales volume
what are the goals of a sales approach to marketing?
guest type, ambience, sales mix
what are examples that are common factors influencing menu price
item contribution margin
what is the difference between the selling price and food cost of a menu item
food cost percent, popularity, marginal cost
what are used in menu analysis
square 4, low food cost, high popularity
what square in the food cost percentage method of menu analysis is most desirable?
contribution margin
what is a variable used in goal value analysis that is not used in the matrix analysis
property management system
what is a computer system used to manage guest bookings, online reservations, check-in/out, and guest purchases of amenities offered by a hotel
calculate before tax net income
what is the first step of the hubbart room rate formula
front office call around
what is asking other hotels their current rates before setting their own rates?
yield
what is the percentage of total potential revenue that is actually realized
room rate and reservation generation fees
What two factors go into calculating net ADR yield for a room
total rooms rev/total room occupied; total room rev/ total number rooms sold
what are the two formulas for calculating ADR
forecast demand, eliminate discounts in high demand periods, increase discounts in low demand periods
what are techniques for revenue management
flow through
what is a measure of the ability of a hotel to convert increased revenue dollars to increased gross operating profit dollars
it reflects the gross operating profits
why is GOPPAR considered a clearer indication of overall performance than RevPAR by many hotel professionals
non room revenue
what are parking fees, food cost, and beverage cost and example of
mixed costs, controllable costs, fixed costs
what are examples of ways to classify costs?
activity based costing
what type of costing includes summing up the percentage of each workers time and pay that is spent on a specific activity
fixed costs
what costs remain the same despite increases and decreases in sales volume
variable costs
what costs increase or decreases as sales volume increases or decreases
scatter diagram, high/low method, regression analysis
what are common methods of splitting mixed costs into their fixed and variable components?
determine total variable costs for the mixed costs
what is the first step for the high/low method
total cost equation
what equation is: total costs=fixed costs+(variable costs per guest * number of guests)
breakeven point
what is the point at which operational expenses are exactly equal to sales revenue
food cost percent, minimum payroll cost for period, variable cost percent
what is necessary for computing a minimum sales point
historical data, future, guide
what are the basic truths about forecasts?
improves employee scheduling, shows arrivals/departrures, never exceeds 100 percent
what are characteristics of a hotels dollar revenue forecast
subtract no shows, subtract early departures, add overstays
how are forecasted adjustments to rooms sold or reserved at a hotel computed?
overstay
a guest who checks out of the hotel after his or her originally scheduled check-out date is what
true
a ratio is created when you divide one number by another; percentage results when the numerator used in your division is part of the denominator
false
when current ratios are greater than 1 the business may have a difficult time paying its short term debt obligations because of shortage of current assets
true
the times interest earned ratio shows the firms ability to cover interest expenses with earnings before income taxes
true
besides being the result of higher sales, a high food turnover could mean that significant wastage, pilferage and spoilage might occur
true
revpar is a measure of performance developed by hoteliers that combines occupancy percentage and ADR
true
the cost of employee meals is included in the cost of food sold on the income statement for a restaurant
true
brand name is an example of an intellectual capital asset
false
guests usually are reluctant to pay more for the same product even when service levels are higher
false
the effect of portion size on menu price is minimal
true
the price/value relationship reflects the guests view of how much value they are receiving for the price they pay
true
a pricing factor when multiplied time a menu items cost, will result in a selling price that yields the desired item food cost percentage
false
when a food item has a low food cost and high popularity it is a good idea to reduce portion size
menu engineering
contribution margin is also known as what?
true
higher priced menu items tend to have the highest contribution margin
true
goal value analysis is a menu pricing and analysis system that used a algebraic formula to replace less sophisticated menu averaging techniques
false
a rack rate is the price at which a hotel sells its rooms to its best corporate customers
true
a hotels room rates are heavily influenced by the laws of supply and demand
true
a cost/volume/profit analysis predicts the sales dollars and volume required to achieve a breakeven point or a desired profit
trend
what is a directional movement of data over time
true
a weighted check average is obtained when total sales over a period of time are divided by total guests over the same period of time
false
a stayover is a guest who checks out of the hotel after his or her originally scheduled checkout time
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