In this course, the difference between Financial and Managerial accounting has been emphasized. The purpose of Problem No. 1 is to encourage analytical thinking of the financial or operating statements.

Purpose: To incorporate the concepts related to the Income Statement and Ratio Analysis.

Resources Provided:

Exhibit No. 1: Summary Operating Statement and Statistics

Instructions Part 1

Use the Summary Operating Statement Exhibit No. 1 to complete the following:

1. Recreate Operating Statement in Excel, make sure to fill in the totals that have been left blank. Formulas must be used to calculate these totals.
2. Next complete a vertical analysis of both years, formulas must be used to complete the analysis.
3. Next complete a horizontal analysis, formulas must be used to complete the analysis.
4. Next answer the following questions related to the Summary Operating Statement:
   1. Name two expenses that would be found in the Information and Telecommunications Systems line on the Operating Statement.
   2. What types of transactions are found in the line item Other under Non-Operating Income and Expenses?
   3. Why is EBITDA less Replacement Reserve not the same as Net Income?

Exhibit No. 1 The Cougar Hotel Summary Operating Statement For the Years Ending December 31, 20x7 and 20x8 20X7 20x8 S % $ % Changes $ % Operating Revenue Rooms Food and Beverage Other Operating Department Miscellaneous Income Total Operating Revenue 9,697,631 3,531,758 627,746 258,354 10,344,459 3,690,474 667,330 273,747 Departmental Expenses Rooms Food and Beverage Other Operating Departments Total Departmental Expenses 2,459,313 2,484,599 361,696 2,600,029 2,569,361 379,384 Total Departmental Profit Undistributed Operating Expenses Administrative and General Information and Telecommunications Systems Sales and Marketing Property Operating and Maintenance Utilities Total Undistributed Expenses 1,044,546 211,732 1,171,586 578,735 423,465 1,108,225 224,640 1,243,009 614,016 449,280 Gross Operating Profit Management Fees 423,465 449,280 Income Before Non-Operating Income and Expenses Non-Operating Income and Expenses Income Rent Property and Other Taxes Insurance Other Total Non-Operating Income and Expenses (18,140) 315,522 488,125 117,634 154,463 (9,087) 325,430 520,233 115,860 200,483 Earnings Before Interest, Taxes, Depreciation and Amortization Replacement Reserve 846,929 898,561 EBITDA less Replacement Reserve STATISTICS Rooms Sold Rooms Occupied Rooms in Hotel 54,969 56,319 200 56,794 58,444 200