The next step is to analyze the data and put meaning to the numbers.

■ In the previous answer, we noted a significant increase in rooms revenue (13.29%), which was matched with an increase in rooms expenses (18.99%).

■ As you go through the percent change column, you notice a decrease in food and beverage revenue (
5.22%), but there was also a matching decrease in food and beverage expense

(
5.12%).

■ One other significant change was in telecommunications, which increased by 26.42% between March and April, but note that the actual dollar amount change was only $1,113.
Revenue for telecommunications is very small compared to revenues for rooms or food and beverage. If rooms experienced a 26% increase, there would be a significant impact to the bottom line.
■ One area of particular interest is the increase in administrative and general expenses of 57.31%. Teresa must further investigate to determine why these expenditures increased $6,651 over one month. Franchise fees and utilities also increased over the period, causing total undistributed operating expenses to increase 12.74%.
■ Even though undistributed operating expenses and fixed expenses increased, there was still an increase of $22,643 (13.69%) in net operating income. This increase was achieved through higher rooms revenue and a slight drop in operating expenses.
Overall, the property appears to be in good shape, but Teresa must conduct further analysis to determine why some of the expense accounts have increased. She could also perform a horizontal analysis on the changes in expenses as a percentage of departmental revenue.