Cover -- Half Title -- Title Page -- Copyright Page -- Preface to the first edition -- Preface to the second edition -- Table of contents -- 1: Introduction to management accounting -- 1.1 Setting the scene -- 1.1.1 Information needs - management and external users -- 1.1.2 Financial accounting and management accounting -- 1.1.3 Basic principles of accounting -- 1.1.4 The management accounting process -- 1.2 Understand the hospitality industry -- 1.2.1 The nature of the hospitality industry -- 1.2.1.1 Goods and services offered -- 1.2.1.2 The distinguishing features -- 1.2.2 Industry organization and recent developments -- 1.2.3 Summary of the key characteristics of the hospitality industry -- Glossary -- Multiple choice questions -- Exercises -- 2: The balance sheet -- 2.1 The components of a balance sheet -- 2.1.1 Assets -- 2.1.2 Liabilities -- 2.1.2.1 Current liabilities -- 2.1.2.2 Long term liabilities -- 2.1.3 Owners' equity -- 2.2 Formats of balance sheets -- 2.3 Establishing simple balance sheets -- 2.4 The Statement of Retained Earnings -- Glossary -- Multiple choice questions -- Exercises -- 3: The profit and loss account statement -- 3.1 Definition and categories of activities -- 3.2 Formats and content of the profit and loss account statements -- Glossary -- Multiple choice questions -- Exercises -- 4: Adjustments to the balance sheet and the profit and loss account -- 4.1 Accounting conventions - accruals and recognition -- 4.2 Adjusting the accounts -- 4.2.1 Stock (inventory) -- 4.2.2 Accounts receivable -- 4.2.3 Depreciation and amortization -- 4.2.4 Returns of goods -- 4.2.5 Discounts -- 4.2.6 Delivery charges -- Glossary -- Multiple choice questions -- Exercises -- 5: The cash flow statement (also called the statement of cash flow) -- 5.1 Cash in the business -- 5.1.1 The importance of cash in the business.

5.1.2 Differentiating profits from cash -- 5.1.3 The need for cash flow statements -- 5.1.4 Categories of activities -- 5.2 Establishing cash flow statements -- 5.2.1 Determine the net cash flow from operating activities -- 5.2.2 Determine the net cash flow from investing activities -- 5.2.3 Determine the net cash flow from financing activities -- 5.2.4 Collate all the previous 3 net cash flows into the definitive SCF -- 5.3 A worked example in the establishment of the SCF using the indirect method -- Glossary -- Multiple choice questions -- Exercises -- 6: Analyzing financial statements -- 6.1 Purposes of analyzing statements -- 6.2 Horizontal analysis -- 6.3 Base-year analysis -- 6.4 Vertical analysis -- Glossary -- Multiple choice questions -- Exercises -- 7: Ratio analysis and types of ratios -- 7.1 Purpose and usefulness of ratio analysis -- 7.2 Classification of ratios -- 7.2.1 Liquidity ratios -- 7.2.2 Solvency ratios -- 7.2.3 Profitability ratios -- 7.2.4 Activity ratios -- 7.2.5 Operating ratios -- 7.3 Performance review process -- 7.4 DuPont analysis -- Glossary -- Multiple choice questions -- Exercises -- 8: Management of working capital -- 8.1 The importance of working capital management -- 8.2 The working capital cycle -- Glossary -- Multiple choice questions -- Exercises -- 9: Cost Management -- 9.1 The nature of costs and assumptions -- 9.2 Types of costs -- 9.3 Activity-based costing -- 9.4 Allocating indirect (overhead) costs to the operating departments -- 9.4.1 Responsibility accounting -- 9.4.2 Determining allocation bases -- 9.4.3 Common methods of cost allocation -- 9.4.4 Illustration of the direct method of cost allocation -- 9.4.5 Illustration of the step method of cost allocation -- 9.5 Separating mixed-costs between their fixed and variable elements -- 9.5.1 High/low two-point method -- 9.5.2 Scatter diagram.

9.5.3 Regression analysis -- Glossary -- Multiple choice questions -- Exercises -- 10: Pricing and Revenue Management -- 10.1 The importance of pricing and the relationship between price and quantity -- 10.2 Approaches to pricing -- 10.3 Pricing rooms -- 10.3.1 The rule of a thousand approach -- 10.3.2 The bottom up approach (Hubbart formula or required rate of return) -- 10.3.3 Relative room size approach -- 10.3.4 Differential room pricing -- 10.3.4.1 Calculating single and double rates -- 10.3.4.2 Integrating the effects of seasonality -- 10.3.5 Room rate discounting -- 10.4 Pricing food and beverage products -- 10.4.1 Subjective pricing methods -- 10.4.1.1 The reasonable price method -- 10.4.1.2 The highest price method -- 10.4.1.3 The loss leader method -- 10.4.1.4 The intuitive price method -- 10.4.2 Objective pricing methods -- 10.4.2.1 Using a mark-up multiplier -- 10.4.2.2 Contribution margin pricing method -- 10.4.2.3 Ratio pricing method -- 10.4.2.4 Simple prime costs method -- 10.4.2.5 Specific prime costs method -- 10.5 Menu engineering -- 10.6 Revenue management -- Glossary -- Multiple choice questions -- Exercises -- 11: Cost-volume-profit analysis -- 11.1 Definition, assumptions and limitations -- 11.2 Contribution margin -- 11.3 Breakeven analysis -- 11.3.1 Establishing the breakeven point -- 11.3.2 Single service analysis -- 11.3.3 Other considerations in breakeven analysis -- 11.3.3.1 First situation - two room types -- 11.3.3.2 Second situation - two room types plus additional services -- 11.3.3.3 Third situation - integrating desired profit levels -- Glossary -- Multiple choice questions -- Exercises -- 12: Internal control -- 12.1 Need for internal control -- 12.2 Special characteristics of the hospitality industry from an internal control perspective -- 12.3 Principles of internal control.

12.4 Basic internal control proposals -- 12.5 Bank reconciliation -- Glossary -- Multiple choice questions -- Exercises -- 13: Forecasting -- 13.1 Nature and limitations of forecasting -- 13.2 Understanding historical data patterns -- 13.3 Approaches to forecasting -- 13.3.1 Qualitative forecasting methods -- 13.3.2 Quantitative forecasting methods -- 13.3.2.1 Time series forecasting methods -- 13.3.2.2 Causal forecasting methods -- 13.4 Selecting forecasting methods -- 13.5 Forecasting in hospitality industry practice -- Glossary -- Multiple choice questions -- Exercises -- 14: Budgeting and variance analysis -- 14.1 The budget and the budget process -- 14.2 Objectives of budgeting -- 14.3 Approaches to budgeting and types of budgets -- 14.4 Types of budgets -- 14.5 Variance analysis -- 14.5.1 Identifying and attributing variances -- 14.5.2 Variance analysis overview -- 14.5.3 Analyzing variances to ascertain causes -- Glossary -- Multiple choice questions -- Exercises -- 15: Capital investment decisions -- 15.1 Types of capital budgeting decisions -- 15.2 Basic methods for making investment decisions -- 15.3 Simple and compound interest -- 15.4 Process of discounting -- 15.5 Understanding factor tables -- 15.6 Discounted cash flow (DCF) methods -- 15.7 Incidence of taxes on DCF analysis -- 15.8 Choosing between projects -- Glossary -- Multiple choice questions -- Exercises -- References for further reading -- Answers to end of chapter multiple choice questions -- Appendix Factor tables -- About the author -- Picture credits -- Index.