Hospitality Management Calculator

The Hospitality Management Calculator has a collection of equations used for hotel and restaurant management. The functions are in several logical groups.

The Income Statement

• Food Cost % for a Hotel- This equation computes the percentage of food cost for a hotel using the food sales over the total revenue.
• Food Cost % for a Restaurant- This equation computes the percentage of food cost for a restaurant using the food costs over the food sales.

Ratio Analysis

• Average Daily Rate (ADR) - The Average Daily Rate computes how much rent should be charged to customers over a period of time.
• Average Sales per Guest (Check Average) - The average sales per guest is the total number of sales over the number of guests served.
• Beverage Available for Sale- This equation uses the beginning beverage inventory and the related purchases made to acquire/produce the beverage for sale.
• Beverage Cost - Using the Cost of Beverage Sold over the Beverage Sales, this equation computes the percentage of the beverage cost.
• Beverage Inventory Turnover Ratio - This equation computes for the Beverage Inventory Turnover Ratio which is a ratio that shows how many times a company's beverage inventory is sold and replaced over a period.
• Cost of Beverage Sold - This equation shows how to calculate the cost of beverage sold though inventory, transfers and purchases.
• Cost of Food Consumed- This equation shows how to calculate the cost of food consumed though inventory and purchases.
• Cost of Food Sold - The Cost of Food Sold includes/takes into account employee meals and transfers alongside inventory and purchases (raw materials).
• Cost per Occupied Room- This equation finds the cost per occupied room using the cost under examination over the number of rooms occupied.
• Food Available for Sale - The Food Available for Sale is the beginning food inventory over the amount of purchases related to produce food.
• Food Cost % - Using the Cost of Food Sold over the Food Sales, this equation computes the percentage of the food cost.
• Food Inventory Turnover Ratio - Inventory turnover is the ratio of cost of food sold by a business to its average food inventory during a given accounting period.
• Labor Cost % - Labor cost percentage is a financial term used to describe a business' labor costs relative to its overall revenue. 
• Net Working Capital- The Net Working Capital  equation is used to determine the availability of a company's liquid assets by subtracting its current liabilities. 
• Occupancy %" - In real estate, occupancy ratio is the number of units in a building that have been rented out as compared to the total number of units in the building.
• Revenue per Available Customer (RevPAC)- RevPAC, as a measure of performance, embodies a shift in perspective from an "asset play" based on hotel properties and rooms to a focus on leveraging customer equity for shareholder wealth.
• Revenue Per Available Room (RevPAR)- RevPAR, or revenue per available room, is a performance metric in the hotel industry that is calculated by dividing a hotel's total guestroom revenue by the room count and the number of days in the period being measured.
• Revenue Per Available Room (RevPAR) v2- RevPAR, or revenue per available room, is a performance metric in the hotel industry that is calculated by dividing a hotel's total guestroom revenue by the room count and the number of days in the period being measured. This is a variation.
• Seat Turnover- This equation computes seat turnover which is the number of times a seat is used by different individuals during a particular meal period or time.
• Server-to-Self-Serve Gests Ratio- This equation computes the ratio of servers to self-served guests. This can be applied to buffets or in catering.
• Server-to-Served Guests Ratio- This equation computes the number of servers required to serve guests. This can be applied to sit down restaurants or cafes.
• Solvency Ratio- The solvency ratio is only one of the metrics used to determine whether a company can stay solvent. 
• White Rice-to-Water Cooking Ratio- The needed water ratio for cooking white rice.
• Wild Rice-to-Water Cooking Ratio- The needed water ratio for cooking wild rice.

Food and Beverage Pricing

• Food Cost %- Using the Cost of Food Sold over the Food Sales, this equation computes the percentage of the food cost.
• Item Food Cost %- Using the Item Food Cost over the Selling Price, this equation computes the percentage of the item food cost.
• Food Selling Price- This equation computes the selling price of a food item denoted by the food cost over its food cost percentage.
• Food Selling Price v2- The Food Pricing Factor is why the price of a food item tends to approach the cost of producing it.
• Food Item Contribution Margin- This equation solves for the Food Item Contribution Margin which a cost accounting concept that allows a company to determine the profitability of food items.
• Total Food Cost- This equation solves for the total cost of food. 
• Average Total Food Cost - This equation takes the amount of Total Food Cost over a number of menu items computing the average.
• Weighted Average Selling Price- This equations finds the weighted average of the cost of food items.
• Average Total Contribution Margin- This equation finds the total contribution margin over a period of time.
• Weighted Average Food Cost %- This equations finds the weighted average of food cost percentage. 
• Weighted Average Item Contribution Margin- This equations finds the weighted average of the item contribution margin.
• Average Number Sold- This equation finds the number sold (item/product/service) over a period of time.

Revenue Management for Hotels

• Average Cost per Room- The Average Cost per Room computes how much cost (expense) is generated on a per room basis over a period of time.
• Estimated Rooms Department Revenues- This equation estimates the revenue generated from department rooms. Revenue is the income that a company receives from its normal business activities.
• Estimated Room Expenses- This equation estimates expenses incurred by a room.
• Average Daily Rate (ADR)- The Average Daily Rate computes how much rent should be charged to customers over a period of time.
• Before-Tax Net Income- Income before taxes is the total value of a company's earnings before account for income tax
• Net ADR Yield- Net ADR Yield is the rate (ADR) actually received by a hotel after subtracting the cost of the fees and assessments associated with a room sale.
• Revenue Per Available Room (RevPAR) v2 - RevPAR, or revenue per available room, is a performance metric in the hotel industry that is calculated by dividing a hotel's total guestroom revenue by the room count and the number of days in the period being measured.
• Total Non-Operating Expenses- This equation takes the total Non-Operating Expenses which are the expenses incurred by activities not relating to the core operations of the business.
• Total Undistributed Operating Expenses- Finds the total expenses related to undistributed operation in a business.
• Total Operated Departments Income Excluding Rooms- This equation computes all the income generated from departments in a business (mainly hotel) that excludes income generated from renting or leasing rooms.
• Occupancy % -  Rooms sold over the rooms available.
• Occupancy % (v2) - Rooms sold and Comp Rooms occupied over the total rooms in the hotel.
• Occupancy % (v3) - Percent occupied using the number of units in a building that have been rented out as compared to the total number of units in the building minus the rooms that are out of order (OOO).
• Occupancy % (v4)  - Percent occupied using the number of units in a building that have been rented out as compared to the total number of units in the building minus the rooms that are on change rooms (OCR).
• Operated Department Income (Rooms)- The amount of profit realized from a business's operations after taking out operating expenses - such as cost of goods sold (COGS) or wages - and depreciation. 
• Operated Department Income for Rooms(a variation) - The amount of profit realized from a business's operations after taking out operating expenses - such as cost of goods sold (COGS) or wages - and depreciation. 
• Net Income for Hotels- A hotel's total earnings (or profit). Net income is calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes and other expenses. 
• Number of Rooms to be Sold in the Year- As the name implies, this equation finds the number of rooms sold in a year.
• Hotel’s Target Net Income- A hotel's target total earnings (or profit). Net income is calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes and other expenses. 
• Hotel’s Required ADR- This equation finds what ADR a hotel must have. A metric widely used in the hospitality industry to indicate the average realized room rental per day.
• GOP-PAR- GOPPAR is a formula of taking the GOP at the end of the month or season and applying it across all days.
• Flow-Through- A legal business entity that passes income on to the owners and/or investors. Flow-through entities are a common device used to limit taxation by avoiding double taxation. Only the investors/owners are taxed on revenues, not the entity itself.
• Yield- The income return on an investment. This refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment's cost, its current market value or its face value

Managerial Accounting for Costs:

• Profit - Profit is a firm's total revenue minus its total cost.
• Revenue - The amount of money that a company actually receives during a specific period, including discounts and deductions for returned merchandise.
• Total Variable Cost - Total variable cost is the opportunity cost incurred in the short-run production that depends on the quantity of output.
• Variable Cost per Guest (VC/Guest) - This equation calculates the variable cost on a per guest basis. 
• Variable Cost per Guest (VC/Guest) v2 - This equation calculates the variable cost on a per guest basis. This is a variation.
• Total Mixed Cost - A mixed cost is a cost that contains both a fixed component and a variable component. 
• Total Mixed Cost v2 - A mixed cost is a cost that contains both a fixed component and a variable component. This is a variation.
• Overhead Allocation per Profit Center - This equation computes overhead allocation for each profit center in operation of a business.
• Contribution Margin - The contribution margin equation determines the sales amount left over after adjusting the variable costs of selling additional products.
• Contribution Margin per Guest (CM/guest) - This equation calculates the contribution margin for each guest present in a business. 
• Contribution Margin Percent (CM%) -  This equation calculates the contribution margin for percentage in a business. The contribution margin is a cost accounting concept that allows a company to determine the profitability of individual products. 
• Break-Even Point in Sales Dollars - In accounting, the break-even point refers to the revenues needed to cover a company's total amount of fixed and variable expenses during a specified period of time. 
• Fixed Cost - A cost that does not change with an increase or decrease in the amount of goods or services produced. 
• Break-Even Point in Guests Served - In accounting, the break-even point refers to the revenues needed to cover a company's total amount of fixed and variable expenses during a specified period of time.
• Sales Dollars to Achieve Desired After-Tax Profit - The sales dollars desired after-tax profit can be attained by adding the fixed costs to the before tax-profit and dividing this by the company's contribution margin ratio.
• Before-Tax Profit - A profitability measure that looks at a company's profits before the company has to pay corporate income tax.
• Number of Guests to Achieve Desired After-Tax Profit - The number of guests to achieve after-tax profit can be attained by adding the fixed costs to the before tax-profit and dividing this by the company's contribution margin per guest.
• Margin of Safety - A principle of investing in which an investor only purchases securities when the market price is significantly below its intrinsic value. 
• Margin of Safety Percentage - This equation finds the percentage of margin of safety.
• Margin of Safety Percentage v2 - This equation finds the percentage of margin of safety. This is a variation.

Forecasting in the Hospitality Industry:

• Average Sales per Guest (Check Average) - The average sales per guest is the total number of sales over the number of guests served.
• Variance (Sales) - Variance is the difference between a budgeted, planned or standard cost and the actual amount incurred/sold. Variances can be computed for both costs and revenues.
• Percentage Sales Variance v2 - This equation shows the percentage of variance in relation to sales.
• Percentage Sales Variance v3 - This equation shows the percentage of variance in relation to sales. This is a variation.
• Sales Forecast - Sales forecasting is the process of a company predicting what its future sales will be.
• Sales Forecast v2 - Sales forecasting is the process of a company predicting what its future sales will be. This is a variation.
• Guest Count Forecast - Guest Count Forecasting is the process of a company predicting what its future guest count will be. 
• Guest Count Forecast v2 - Guest Count Forecasting is the process of a company predicting what its future guest count will be. This is a variation. 
• Sales per Guest Forecast - Sales per Guest Forecasting is the process of a company predicting what its future Sales per Guest will be. 
• Average Sales per Guest Forecast - Average Sales per Guest Forecasting is the process of a company predicting what its future Average Sales per Guest will be. 
• Occupancy % (v1, v2 etc.) - In real estate, occupancy ratio is the number of units in a building that have been rented out as compared to the total number of units in the building.
• Occupancy Forecast % - Occupancy Forecast Ratio finds the percentage of the company's predicted occupancy forecast. In real estate, occupancy ratio is the number of units in a building that have been rented out as compared to the total number of units in the building. 
• Net Availability of Rooms - This equation finds what rooms are suitable/ready for use at hand. 
• Rooms Sold or Reserved - This equation finds which rooms have been sold or reserved by tenants.
• Total Forecast Sold or Reserved after Adjustments - This equation finds the number of forecasts sold or reserved.
• Occupancy Forecast - Occupancy Forecasting is the process of a company predicting what its occupancy will be.

Budgeting and Internal Controls:

• Budgeted Profit - Budgeted profit is the difference between estimated revenues and estimated expenses as determined by the different budgets a company prepares, i.e. sales budget, production budget, selling and administrative expense budget, etc.
• Sales Forecast v2 - Sales forecasting is the process of a company predicting what its future sales will be. This forecast is done for a particular period of a time in the near future, usually the next fiscal year.
• Selling Price Forecast (Check Average) - Selling Price Forecast is the process of a company predicting what its future Selling Price will be.
• Forecasted Cost - Forecasted Cost computes the prediction of a company's desired future cost. 
• Cost per Cover Forecast - Cost per Cover Forecast is the process of a company predicting what its future Cost per Cover will be. 
• Forecasted Labor Cost - Forecasted Labor Cost computes the prediction of a company's desired future labor cost. 
• Budgeted Payroll Allocation - The Budgeted Payroll Allocation computes the portion of a business' resource that it must distribute to its employees for a set period of time or on a given date. 
• Budgeted Payroll - The Budgeted Payroll is the sum total of all compensation that a business must pay to its employees for a set period of time or on a given date. 
• Budgeted Hourly Payroll -The Budgeted Payroll is the sum total of all compensation that a business must pay to its employees based on an hourly rate.
• Variance (Expense) - The difference between a budgeted, planned or standard cost and the actual amount incurred/sold.
• Percentage Expense Variance v2 - This equation shows the percentage of variance in relation to expense.
• Percentage Cash Variance v3 - This equation shows the percentage of variance in relation to cash. This is a variation.
• Forecasted Costs - Forecasted Costs computes the prediction of a company's desired future costs. 

Capital Investment, Leasing and Taxation:

• Total Investment Value - The value of property to a particular investor,aside from the property's general market value.
• Future Value v2 - Future Value (FV) is a formula used in Finance to calculate the value of a cash flow at a later date than originally received.
• Present Value - This equation computes the present value of money planned or estimated in the future that has been discounted to reflect its current value as if it existed today.
• Return on Investment (ROI) - The ROI equation is used to measure the benefits of a particular investment or to compare the performance or benefits across several other investments. It is also known as the rate of return.
• Savings Rate of Return - The gain or loss on a savings investment over a specified period, expressed as annual savings over the capital investment.
• Payback Period - This equation is used to quickly determine the length of time it will take to recoup the initial amount invested on a project or investment.
• Cap Rate % (v1 and v2) - A rate of return on a real estate investment property based on the expected income that the property will generate. Capitalization rate is used to estimate the investor's potential return on his or her investment.
• Property Value Estimate - Property value is an estimate of what a home or a piece of land is actually worth.
• Debt Coverage Ratio - The debt coverage ratio is used in banking to determine a companies ability to generate enough income in its operations to cover the expense of a debt. On a broader level, it may also be used internally by a company for the same reason.

~Resources~

Formula PDF List : Click Here

Guide for Completing Hotel/Motel Income and Expense Forms: Click Here

• Dopson, Lea R., and David K. Hayes. Managerial Accounting for the Hospitality Industry. Hoboken, NJ: Wiley, 2009. Print.
• Miller, Jack E. Student Workbook Food and Beverage Cost Control, Third Edition. Hoboken, NJ: Wiley, 2005. Print.