Glossary

From Virbus

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Accounts payable / Verbindlichkeiten aLuL/ Obveznosti/ Võlgnevused tarnijatele / Vieras pääoma

Accounts payable include outstanding bills from suppliers and service companies, loans and similar debts. They are indicated on the balance-sheet as outside capital.

Accounts receivable / Forderungen aLuL / Terjatve/ Nõuded ostjate vastu / Myyntisaamiset

Invoices to customers not paid yet. Part of current assets in the balance sheet.

Administration costs / Verwaltungskosten / Stroški administracije/ Administratiivkulud / Hallintokulut

Administration costs include all costs at the company level, which support the business operations. Examples of administration costs are general administration, budgeting, accounting, business services, maintainance, insurance, transportation, ect.

ADR (Average Daily Rate)/Poprečna dnevna cena/ Keskmine toa hind / Keskimääräinen päivähinta

ADR Average Daily Rate is a statistical unit that is often used in the lodging industry. The number represents the average rental income per occupied room in a given time period. ADR along with the property's occupancy are the foundations for the property's financial performance. The ADR can calculated by dividing the room revenue by the number of rooms sold.
For further information see http://en.wikipedia.org/wiki/Average_daily_rate

Annual Financial Statement / Jahresabschluss /Letni izkaz poslovanja/ Majandusaasta aruanne / Vuositilinpäätös

A document sent to shareholders that communicates a public company’s version of operations and performance. Information includes earnings, revenues, balance-sheet data, an auditor’s statement, and management’s discussion of the company’s track record and future direction. You can obtain a copy of the annual report from the company, usually from the investor relations department.

Assets / Anlagevermögen (Aktiva)/Sredstva/ Varad / Vastaavaa (varat)

The left side of the balance-sheet on which the company’s assets are listed. One distinguishes between fixed and current assets.

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Balanced Scorecard 

The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action.
For further information see Balanced Scorecard

Balance sheet / Bilanz / Bilanca stanja / Bilanss / Tase  

The balance sheet is a comparative listing of all assets, equity, and borrowed capital at a certain day. Every company has to create a balance sheet at least once a year. The Balance Sheet informs us about the size, type and composition of a company’s assets at a given time. It further shows the capital structure of a company or how the assets are financed. The Asset side contains the current assets and fixed assets. This side shows us, how we invested (spent) our money. It is the capital expenditure side. The fixed assets are land, buildings, machines, etc. Fixed assets stay within the company for years and are used for a longer period of time. The current assets “move” through the company at a relatively fast rate. These include stocks, accounts receivable, cash, and cash in bank. This rate is called “rate of the capital turnover.” The Liability side consists of equity and borrowed capital, capital that is owned by outside parties. This side shows us how we finance our company.

Break Even Point / Točka preloma ali prag rentabilnosti/ Kasumilävi / Kriittinen piste 

Breakeven is the level of sales where profit is 0.
For further information see http://en.wikipedia.org/wiki/Break-even

Business Plan / Geschäftsplan / Poslovni načrt / Äriplaan / Toimintasuunnitelma 

see Business Plan

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Cash Flow / Kapitalfluss / Denarni tok / Rahavoog /Kassavirta  

The Cash Flow shows, to what amount a company’s liquid funds have increased (positive cash flow) or decreased (negative cash flow) during a set period.

Capex (Capital Expenditure)/ Investitionsausgaben / Investicijski izdatki / Investeeringud põhivarasse / Käyttöomaisuushankinnat/Irtaimistohankinnat  

Money spent to acquire or upgrade physical assets such as buildings and machinery. This tends to be a very large expense for companies with significant manufacturing facilities, and usually much less of an expense in the services sector. Also called capital spending or capital expense.

Cost Plus Pricing / Metoda kalkulacije prodajne cene – stroški plus / Kulupõhine hinnakalkulatsioon / Kuluperusteinen hinnoittelu

Cost-Plus Pricing - setting the price at the production cost plus a certain profit margin. That Cost-Plus Pricing is a price increment is added to the cost of providing the product or service. The mark-up provides the profit margin. Cost-plus price based upon a mark-up over the cost of an item. This method is extended to specific customers for specific price classes only. The mark-up percentage may be set individually for each customer and for each price class for that customer. Cost-plus pricing - works well when the buyer and seller don't know what the cost of production will be but agree to a target profit over and above the product cost. Cost-plus pricing involves setting price by starting with the cost to provide a product or service and then adding a mark-up above the cost. The mark-up provides the company with its profit margin.

Contribution margin / Deckungsbeitrag / Stopnja pokritja / Jääktulumäär / Myyntikate  

COGS (Cost of Goods Sold)/ Herstellungskosten / Stroški prodanega blaga / Müüdud kaupade kulud / Aineet, tarvikkeet ja tavarat  

On an income statement, the cost of purchasing raw materials and manufacturing finished products. Equal to the beginning inventory plus the cost of goods purchased during some period minus the ending inventory. also called cost of sales.

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Depreciation / Abschreibung / Amortizacija / Kulum / Poistot  

Depreciation is a decline in the value of an asset (property, building, machinery etc.) due to general wear and tear or obsolescence. It is the accounting procedure for an actual or assumed loss of value of an asset. They serve for proper representation of the asset’s value and the correct yearly distribution of expenses

Distribution channel / Absatzwege / Distribucijski kanal / Jaotuskanal / Jakelukanava  

see Distribution channel

DuPont Scheme / DuPontov obrazec / Du-Ponti puu  

see

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EBIT (Earnings before Interests and Taxes)/ Dobiček iz poslovanja / Ärikasum / Tulos ennen korkoja ja veroja  

Also referred to as “operating profit“ or “operating results”. The EbIT shows the value added by operations excluding taxes and financing costs.
For further information see http://en.wikipedia.org/wiki/Earnings_before_interest_and_taxes|EBIT

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Financial Ratios / Finanzwirtschaftliche Kennzahlen / Rahandussuhtarvud / Finančni kazalci / Finantssuhtarvud / Tunnusluvut  

Financial ratios or accounting ratio are a ratio of selected values on a company’s financial statements. There are many standard ratios used to evaluate the overall financial condition of a corporation or other organization. See also http://en.wikipedia.org/wiki/Financial_ratio

Fixed Costs / Fixkosten / Fiksni stroški / Püsikulud / Kiinteät kulut  

In contrast to variable costs of a short-term operating change respectively of a change of yield capacity independent costs Absolute fix costs result from maintaining a state of readiness (e.g. registration taxes, insurance premiums, rent and lease payments) independent of operation. Interval fixed costs change erratically due to fluctuating operating maximum and minimum levels (e.g. additional hiring of employees, rental of an additional warehouse). Fixed costs include administration, marketing, staff and depreciation costs.

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Going rate / marktüblicher Preis / Trna cena / Konkurentsipõhine hind  

The going rate to set prices pricing is derived from two factors: 1) what competitors are charging and 2) what customers are willing to pay – link to value based pricing, See also Pricing Management

GOPPAR / Bruto dobiček na razpoložljivo sobo / Brutokasum hotellitoale  

GOPPAR is defined as total gross operating profit (GOP) per available room, where GOP is equal to total revenue less the total departmental and operating expenses. While GOPPAR does not allow an accurate evaluation of the rooms revenue department, it does provide a clear indication of a hotel’s profitability and management’s efficiency. see http://www.hotelmarketing.com/index.php/content/article/goppar_a_derivative_of_revpar/

Gross Profit / Bruttogewinn / Bruto dobiček / Bruotkasum / Myyntikate  

Gross profit is the difference between revenue and costs of making a product or provide a service, before deducting overheads, payrolls, interest payments and taxation.

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Market based pricing / Preissetzung auf Basis von Marktpreisen / Konkuren计 cena (trna cena) / Turupõhine hinnakujundus / Kysynnän mukainen hinnoittelu  

Method of setting the price based on the results of your market research, which should tell you how much your potential customers are willing to pay for the product, or service. In Market-Based pricing it is generally considered that the producer will investigate how much is usually paid for a certain product in the markets. This can be benchmarked by comparison. If this model is used then the price elasticity of demand (for further information refer to elasticity theories) should be very well known. Large and positive elasticity in the price/volume relationship indicates that reductions to the general price level can be made quite safely. If elasticity is negative, a price increase should be considered. On the other hand, plain willingness to pay is not enough if the potential customer base has no disposable assets or credit (also actual liquidity) for the purchase. Thus, you need supporting data on specific and detailed markets and buying consumer behavioral analyses. (Richard. 2005). Prices are based on the going rate for the product or service. Different features to be considered in researching this method of pricing: Is your product more convenient to buy than the competitors? Are you selling when others are not? Is your product unique, or very rare? What is the marketing mix for your particular product/service and profile of your customer base?

Marketing costs / Marketingkosten /Stroški trženja / Turunduskulud / Markkinointikulut  

Marketing costs includes all costs for marketing activities of the hotel. Examples of marketing costs are market analysis and planning, advertising, online publicity, press releases, trade shows, ect. Costs for marketing activities differ, for example costs a newspaper add appr. 300 - 1.200€ depending on the local/regional range of the newspaper. A 30 sec. TV commercial costs appr. 600 - 132.000€ depending on time and popularity of a TV program. Internet marketing in terms of pop-up banners etc. can be booked for free or cost up to 1.000€ per week depending on topic and domain.

Mark-up / Handelsspanne / Hinnalisand  

Pricing Management

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Payment conditions / Zahlungsbedingungen / Plačilni pogoji / Maksetingimused / Maksuehdot  

Agreement (in writing or vocal) in between contracting parties (B2B or B2C) how, when etc. the payment should be processed.

Price elasticity / Preiselastizität /Cenovna elastičnost / Hinnaelastsus / Hintajousto  

The Price Elasticity of Demand (commonly known as just price elasticity) measures the rate of response of quantity demanded due to a price change. The formula for the Price Elasticity of Demand (PEoD) is: PEoD = (% Change in Quantity Demanded)/(% Change in Price)

Price point / Cenovna struktura (razlikovalne cene) / Hinnapunkt / Hintapiste  

One specific price at specific point of time. Normally for any products/services there exist many (sometimes even thousands) price points for different customer segments at different time line with different purchasing and contracting conditions.

Profit and Loss account/ Gewinn-und Verlustrechnung / Bilanca uspeha / Kasumiaruanne / Tuloslaskelma  

P&L account is a periodic accounting procedure, in which the revenues are opposed to the costs of an accounting period.The P&L Account shows the success of an accounting period. Thus, operating results as well as the after-tax-results are most closely regarded. The Operating Profit or EbIT (Earnings before Interest and Tax) shows the results of the production as well as operative activities while the after-tax-results express the success of the whole company after considering finance costs and other outstanding returns and taxes. When this is positive (revenues > costs) the company has made a profit. When speaking of a loss or an annual shortfall, then the total of the P&L Account will be negative (revenues < costs).

Porter’s 5 forces analysis / Porterjeva analiza 5 sil / Porteri viie mõjujõu mudel / Porterin 5 kilpailuvoiman-malli 

see Porter's Five Forces Analysis

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Return on Assets (ROA)/ Gesamtkapitalrentabilität / Donosnost sredstev / Varade rentaablus / Koko pääoman tuottoaste  

ROA is the indicator which measures the company’s performance. ROA shows us, how profitable a company is relative to its total assets. The operating results are proportionately compared to the total assets. The ROA evaluates the performance relative to the return on the capital invested in the company.The higher the ratio is the better performance is.

Return on Equity (ROE)/ Eigenkapitalrentabilität / Donosnost kapitala / Omakapitlai rentaablus / Oman pääoman tuottoaste  

ROE shows us, how much profit a company generates with the money, which shareholders have invested. The higher the ratio is the better performance is.
See also http://www.streetauthority.com/terms/r/return-on-equity.asp

Room occupancy rate / Auslastungsgrad / Stopnja zasedenosti sob / Tubade täitumuse määr / Huonekäyttöaste  

hotel room occupancy rate (%) shows, how many rooms are sold from total number of rooms to be sold. The occupancy rate can be calculated per day, week, month, year aso.
Room occupancy rate (%) = Number of sold room (per period)/Number of total room (per period)

Return on Investment (ROI)/ Donosnost investicije / Investeeringute rentaablus / Sijoituksen tuottoaste  

ROI shows us, how much return (profit) from the investment has been generated by the company management’s performance in the certain period of time. The higher the ratio is the better performance is.

Revenue per available room(RevPAR)/ Prihodek na razpoložljivo sobo / Tulud olemasolevate tubade kohta  

A performance metric in the hotel industry, which is calculated by dividing a hotel's total guestroom revenue by the total room count and the number of days in the period being measured.Keep in mind that RevPAR does not take into account revenue from other hotel services, such as restaurants, spas, etc. Additional info: http://www.streetauthority.com/terms/r/revpar.asp

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Seasonality / Saisonalität / Hooajalisus /Sezonskost / Sesoonsus / Kausivaihtelu  

see Seasonality

Service Quality / Servicequalität / Kakovost storitev / Teeninduskvaliteet / Palvelulaatu  

see

Strategic Management / Strategisches Management / Strateški menedžment / Strateegiline juhtimine / Strateginen johtaminen  

see Strategic Management

SWOT / Stärken-Schwächen-Analyse / Analiza prednosti, slabosti, nevarnosti in priložnosti / Tugevused-nõrkused-ohud-võimalused  

see SWOT – link to theory

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Variable Costs / Variable Kosten / Variabilni stroški / Muutuvkulud / Muuttuvat kulut  

see Variable Costs

Value based pricing / Preissetzung auf Basis des wahrgenommenen Käufernutzens / Ciljna cena (definirana na podlagi vrednosti, ki jo gosti percepirajo) / Väärtuspõhine hinnakujundus / Arvoperusteinen hinnoittelu  

Base the price on the effective value to the customer. The price is based on an estimate of the maximum perceived value of the product or service and the maximum price customers will pay. Value may be one of the most overused and misapplied terms in marketing and pricing today. Value pricing is too often misused as a synonym for low pricing. The real essence of value revolves around the trade-off between the benefits an individual gets from a product/service vs. the price he pays for it, or more accurately the perceived benefits received and the perceived price paid. This causal relationship can be expressed with a simple equation:
Value = perceived benefits - perceived price. (Marn, Roegner, Zavada. 2004)
This focuses on the price you believe customers are willing to pay, based on the benefits your business offers them. Value-based pricing depends on the strength of the benefits you can prove you offer to customers. If you have clearly-defined benefits that give you an advantage over your competitors, you can charge according to the value you offer customers. While this approach can prove very profitable, it can alienate potential customers who are driven only by price and can also draw in new competitors. (Source : Businesslink web pages, October 2007)

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Working Capital / Betriebskapital / Obratna sredstva / Käibekapital / Käyttöpääoma  

Working capital is a financial metric which represents operating liquidity available to a business. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. It is calculated as current assets minus current liabilities. Positive working capital is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short-term debt and upcoming operational expenses.See http://en.wikipedia.org/wiki/Working_capital
See also http://www.investopedia.com/terms/w/workingcapital.asp

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