Vertical Analysis Assessment

Assignment Overview
The Jasmine Hotel is a medium sized hotel located in the Sydney CBD. It is part of the successful
Jasmine Hotel Group that was established some ten years ago. The hotel group is Australian based, it
does not have operations outside of Australia. The Jasmine Hotel, Sydney is the newest addition to
the group and has been operating for just six months. Without any historical trading results to
compare current performance to, it is appropriate to conduct a vertical analysis of the Profit & Loss
Statement in order to evaluate performance and control day-to-day operations.
As the Food & Beverage Manager you are required to undertake a comparative vertical analysis of
the operational results for the Food and Beverage Department. For this purpose, you are provided
with the performance benchmarks used across the hotel group. Based on this analysis, identify areas
of significant overspend and suggest possible causes.
Assignment Instructions
From the information provided for the Food and Beverage Department you are to:
1. Convert the Profit & Loss Statement to a comparative vertical analysis format.
2. Identify and explain areas of significant overspend in relation to expenses and suggest
possible causes. Address the three most significant areas of overspend only.
3. Select one of the areas of significant overspend identified in part 2. What
data/information/records/source documents (in addition to the Profit & Loss Statement and
vertical analysis) could you review, to fully investigate the actual cause of the overspend
Written Report Requirements
The assignment should be clearly divided into the three parts detailed above.
The assignment is to be written in Word and submitted online via the submission link on LCB Digital.
A minimum of 75% of your submission must be original (apart from the Profit & Loss Statement and
benchmarks provided). All non-original material must be referenced.
Please note: Do not include an introduction or a conclusion. Be sure to display all percentages in the
comparative vertical analysis to one decimal place.
Accounting Principles & Practice
2
The Jasmine Hotel Departmental Profit & Loss Statement Food and Beverage Department
For the Period January to June 2016
Sales Revenue $
Restaurant 345,600
Coffee Shop 178,700
Banquets 245,100
Room Service 62,600
Bar 171,800
Total Sales Revenue 1,003,800
Cost of Goods Sold
COGS Food & Beverage 293,600
Gross Profit 710,200
Departmental Expenses
Salaries & Wages 325,678
China, Glassware 5,790
Cleaning Supplies 6,895
Decorations 4,300
Electricity 62,400
Laundry 21,200
Licenses 6,600
Linen 5,225
Menus 2,700
Miscellaneous 23,875
Paper Supplies 5,950
Repairs & Maintenance 44,250
Stationery 4,255
Uniforms 14,600
Utensils 1,800
Total Departmental Expenses 535,518
Departmental Profit (Income) 174,682
Accounting Principles & Practice
3
The Jasmine Hotel Group Performance Benchmarks Food and Beverage Department
For the Year 2016
Sales Revenue %
Restaurant 35.2%
Coffee Shop 18.0%
Banquets 23.5%
Room Service 7.0%
Bar 16.3%
Total Sales Revenue 100.0%
Cost of Goods Sold
COGS Food & Beverage 29.0%
Gross Profit 71.0%
Departmental Expenses
Salaries & Wages 30.0%
China, Glassware 0.6%
Cleaning Supplies 0.7%
Decorations 0.5%
Electricity 6.0%
Laundry 1.8%
Licenses 0.7%
Linen 0.5%
Menus 0.3%
Miscellaneous 2.5%
Paper Supplies 0.7%
Repairs & Maintenance 4.0%
Stationery 0.4%
Uniforms 1.1%
Utensils 0.2%
Total Departmental Expenses 50.0%
Departmental Profit (Income) 21.0%
Accounting Principles & Practice
4
Marking Guide
Criteria % Excellent Very Good Good Adequate
Needs
some more
work
Needs
much more
work
Unacceptable
Comparative vertical
analysis statement 20
Interpretation of results:
identification &
explanation of overspend
& causes
40
Data sources: explanation
of additional data
appropriate to
investigation of overspend
10
Terminology:
appropriate/correct use of
accounting terminology
10
Presentation: overall
readability, including
grammar, spelling &
punctuation, clarity of
expression & proper
referencing
20
Total 100 Overall Grade =

The Jasmine Hotel Departmental Profit & Loss Statement Food and Beverage Department For the Period January to June 2016
Sales Revenue $ % Benchmark % Different
Restaurant 345,600 34.4 35.2 -2.2
Coffee Shop 178,700 17.8 18 -1.1
Banquets 245,100 24.4 23.5 3.9
Room Service 62,600 6.2 7 -10.9
Bar 171,800 17.1 16.3 5.0
Total Sales Revenue 1,003,800 100.0 100 0.0
Cost of Goods Sold
COGS Food & Beverage 293,600 29.2 29 0.9
Gross Profit 710,200 70.8 71 -0.4
Departmental Expenses
Salaries & Wages 325,678 32.4 30 8.1
China, Glassware 5,790 0.6 0.6 -3.9
Cleaning Supplies 6,895 0.7 0.7 -1.9
Decorations 4,300 0.4 0.5 -14.3
Electricity 62,400 6.2 6 3.6
Laundry 21,200 2.1 1.8 17.3
Licenses 6,600 0.7 0.7 -6.1
Linen 5,225 0.5 0.5 4.1
Menus 2,700 0.3 0.3 -10.3
Miscellaneous 23,875 2.4 2.5 -4.9
Paper Supplies 5,950 0.6 0.7 -15.3
Repairs & Maintenance 44,250 4.4 4 10.2
Stationery 4,255 0.4 0.4 6.0
Uniforms 14,600 1.5 1.1 32.2
Utensils 1,800 0.2 0.2 -10.3
Total Departmental Expenses 535,518 53.3 50 6.7
Departmental Profit (Income) 174,682 17.4 21 -17.1

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