The Sarova Hotel Budget Analysis

664 Words Jan 30th, 2018 3 Pages
Among the key functions of a budget are; setting business objectives, assessing alternative plans, monitoring outcomes and are redefining the company's objectives and plans. When a company has a comprehensive budget it means that it has a formal and overall plan which contrasts the intuitive approach to operations. Budgets are often prepared for a period of one year although in some cases it can be shorter or longer. Normally in a budget the management is answerable only for variations that are under their control although the whole budget is their sole responsibility. Failure to achieve the target sales because of high levels of sales return may or may not be the fault of the sales department alone Gowthorpe (2005)
Budgeted sales and relationship of certain current assets helps in developing budgets of purchases. What is normally shown in the assets sections, shows the assets requirements
There are four basic functional units in budget; this includes marketing, production, purchasing and finance. These components must be fully incorporated when drafting the budget. Geraldine & Joseph (1990)
Below is a 3 year budget for The Sarova Hotel
INCOME
DESCRIPTION
PREVIOUS YEAR
PRESENT YEAR
NEXT YEAR
Rooms
Number of rooms x average spend
900,000
1,032,000
1,072,000
Food
Number of rooms x average spend
350,000
350,000
370,000
Drinks
Number of rooms x average…