Sales

HA401 : The Class : Finance : Revenues : Sales

Revenues and Sales

All revenues are the result of the number of customers and how much they pay for a product or service. Examples:

Restaurant Sales = Customer Counts X Average Check

Hotel Sales = Rooms Sold X Average Rate

RATE is calculated by adding up the total revenues and dividing that total by the number of guests or rooms sold.

Examples:

Restaurant Average Check = Total $ sales / number of customers or $1,000 in sales divided by 45 customers = $22.22 average check.
Hotel Average Rate = Total sales / total rooms sold or $1,000 in revenue divided by 25 rooms sold = $40 average rate.
A Casino would divide total sales by total number of customers to get a guest expenditure rate.

VOLUME is simply the number of units sold, bought, occupied. For example number of guests in a restaurant, number of rooms sold, number of casino players. INCREASES OR DECREASES OR CHANGES

When analyzing revenues, it is important to identify where increases or decreasing are coming from. Are there increases in the number of guests or the amount they are spending/paying. It is also useful to identify the causes of these changes:

did lower rates produce higher volumes
did an advertising campaign produce higher volumes
did new competition lower volumes
did a rate increase produce lower volumes

Once you have completed this module you should:

Go on to Reading 2: Profites
or
Go back to Topic 1: Revenues

E-mail Lloyd Shelton at Lloyd.Shelton@nau.edu
or call (928) 527-7518