Sunday, February 2, 2020

Accounting for strategic management & control - Research-based Case Study

Accounting for strategic management & control - Research-based Assignment - Case Study Example Last, two mind maps presenting the Hotel’s problem and the article’s main arguments are also included. The above mind (appendix 2) map shows the key problems facing Boutique Hotel, which could be blamed for the recent decline in the financial performance. First, lack of interaction between the organization and the financial department, situated in the parent company, is a sign of ineffective management. A company’s financial manager should maintain constant interaction with the organization’s manager in order to facilitate a deep analysis of the organization’s current financial situation (Case study, 2014). Ave-Co’s financial department has failed to conduct a deep financial analysis using various methods such as ratios. The current key performance indicators used in the organization are occupancy percentage and the return on investment. From economic and financial point of view, the two performance indicators are overly weak. The occupancy rate for the year 2011 to 2014 were 266.45, 277.4, 295.65 and 299.3 respectively, showing an increase in the occupancy rate. on the other hand, the return on investments for the same years were 6.665%, 9.483%, 13.84%, and 11.95 respectively, showing an increase followed by a decrease in the asset utility rate. Some critical aspect of the company’s performance, such as costs and liquidity is left unevaluated (Case study, 2014). Therefore, both the occupancy and asset utility rate represent a skeleton analysis of the company. The absence of the financial analysis of the company has clouded both the management’s and the financial department’s view to realize the insufficiency of the performance indicators implemented in the company. Consequently, the same old strategy has been in action leading to the decline of the company’s financial performance (Case study, 2014). Second, the preparation of budget is important for planning and controlling, coordinating, communication

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