HRTM 421 Chapter 3 and Chapter 4 Quizzes (Solved)

A lender reads financial statements to evaluate the company's recent performance versus its market segment and competitors, determine important trends, and project future earning for the company. correct answers False Vertical analysis is most often used to analyze and control variable expenses that appear on a hospitality company's income statement. correct answers True Liquidity ratios are used to gauge the effectiveness of how assets have been managed. correct answers False Food inventory turnover is an example of a solvency ratio. correct answers False The goal of revenue management is to maximize food and beverage pricing. correct answers False Horizontal analysis: correct answers tracks and analyzes both income statement and balance sheet line items over a specific period. The current ratio is calculated by: correct answers dividing current assets by current liabilities. Operating ratios: correct answers assist management in determining how efficient the operation is. Employee scheduling is an important part of management decision making because: correct answers the hospitality industry is very labor intensive. Off-balance-sheet financing: correct answers is used by companies that do not want to show debt on their balance sheet associated with real estate joint venture of which they own a percentage. Working capital is the difference between current assents and current liabilities. correct answers True When managing working capital, any surplus cash not required to operate your business should be used to fund projects that will generate additional cash flow. correct answers True Offering a discount on cash sales saves the business money, because the company does not have to pay credit card company transaction fees. correct answers True Cash provides a business liquidity and buying power. correct answers True A cash forecast, in essence, is a cash budget. correct answers True The longer it takes to collect accounts receivable: correct answers the more working capital a business will need.