HFT 3431 Exam 2 Review

Chapter 5 Problems – Ratio analysis –Current ratio –ADR –Occupancy percentage –Profit margin –A/R Turnover –REVPAR –Food or beverage turnover

Chapter 5 Terminology Classes of ratios Definition of each & which categories ratio fall into –Liquidity –Solvency –Activity –Profitability –Operating

Chapter 6 Problems Calculate indifference point (fixed versus variable lease) –VC % x R = FC

Chapter 6 Terminology Identify types of costs –Variable –Fixed –Mixed Relevant range Differential costs Controllable versus non-controllable costs Sunk costs Step costs Avoidable costs Incremental costs Prime costs Unit costs Capacity costs Overhead costs

Chapter 7 Problems Breakeven problems –0 = SX-VX-F –X = F / (S-V) –F = SX – VX –S = (F/X) +V –V = S – (F/X)

Chapter 7 Terminology Leverage Margin of safety Cost Volume Profit Analysis Contribution Margin (and calculation) Contribution Margin Ratio Sensitivity Analysis

Chapter 8 Price Elasticity of Demand –((Q2-Q1)Q1) / ((P2-P1)/P1) –Elastic or Inelastic ( -1 to 1) –Sensitive or Insensitive Suggested Price Multiplier Alternative to Multiplier Single & Double Room Rate Calculation

Other Scantron (brown form 2052 required) 50 Multiple Choice Questions Bring your own calculator. No sharing or cell phones Formula sheet provided