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To understand the P&L, it is important to look at the overall picture of the department and whether the variance in the overall revenue & profit is favorable or unfavorable.
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Step 3 – Ascertain the Revenue & Profit variances If revenue is high, but profit has not increased relatively (i.e flow through is low), then it’s bad news because the hotel may not be managing expenses well. Your hotel must maintain the flow through of profits compared to the revenue shortage or excess. GOP flow through is an important aspect of managing the profitability of departments. Variances, GOP flow-through and operational ratios are very important in analysis of P&Ls.
#Income statement template word for hotel software
Some software does not calculate per occupied room statistics, while some does not add occupancy statistics. The second step is to calculate the variance columns because some standard hotel accounting software doesn’t give the variances column and a few of them just give variance vs budget and don’t compare to the previous year. Step 2 – Calculate necessary variances and supporting ratios It’s much easier calculate the variances or calculate percentages which will make it easier for you to review. If your profit or loss is not in Excel, either you can type it out or you can ask your finance department to export it into Excel and give it to you.
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The first thing you should do is export the P&L into an Excel file, because it makes it easier to calculate formulas and calculate variances in Excel for further analysis of income statements. Let’s take a look at the various steps of analysing hotel income statements.