PROJECT REPORT

ON

“A STUDY ON MANAGEMENT OFRECEIVABLES”

OF
HOSPITALITY INDUSTRY

Submitted in Partial Fulfillment of the Requirement of Degree in

BACHELOR OF BUSINESS ADMINISTRATION (BBA)
OF
Affiliated to MAHARSHI DAYANAND UNIVERSITY, ROHTAK
(Session: 2019-20)
SUBMITTED TO:
SUBMITTED BY:
Ms. BHARTI AGGARWAL
SHIVANITHAKUR
Assistant Professor
BBA 6th Semester
Dept. of Business Administration
Roll No. 1525220014
Reg.No-17-F-2340215
Univ. Roll No -

DAV CENTENARY COLLEGE

NH-3, NIT FARIDABAD
“AFFILIATED TO MAHARSHI DAYANAND UNIVERSITY ROHTAK”
 Phone: 0129-2415044

D.A.V. CENTENARY COLLEGE,

Accredited with ‘A’ Grade by NAAC
N.H.-3, N.I.T. FARIDABAD
(Affiliated to M.D. University Rohtak, Haryana)

Ref. No. ………………… Date: ………………………

CERTIFICATE

This is to certify that Project Report, titled “A STUDY ON MANAGEMENT

OFRECEIVABLES OF HOSPITALITY INDUSTRY”embodies the original

work done byMs. SHIVANI THAKURunder College Roll No. 1525220014

and University Roll No. _________________________ and University

Registration No. 17-F-2340215in partial fulfillment of the course requirement

of BBA(GEN)-6th Semester in session 2019-2020.

(Ms. Bharti Aggarwal)

Project Guide (Finance)
Assistant Professor
Department of Business Administration
ACKNOWLEDGEMENT

Project report is a part of our curriculum that gives us knowledge about practical work. This
also helped us to understand the various aspects of the conceptual studies in the concerned
subject. This report presented here is the part of the syllabus of the BBA degree provided by
M.D.University, ROHTAK, So for this ,I would like to thank Maharshi Dayanand
University, Rohtak for giving the opportunity for doing the projectwork.

I would like to thanks to DAV Centenary College, Faridabad to provide me the opportunity
to prepare the project report.

IexpressmysincerethankstoMs.BHARTIAGGARWAL,myprojectguide,whohaskindly
extended her valuable time and unconditional support in completing the project well intime.

SHIVANI THAKUR
PREFACE

As a part of the BBA General and in order to gain practical knowledge in the field of
management, I am required to make a report on A STUDY ON MANAGEMENT OF
RECEIVABLES OF HOSPITALITY INDUSTRY. The Basic objective behind doing this
project is to get knowledge about the Receivable Management that how it works.

This project report attempts to bring under one cover the entire hard work and dedication put
in by me in the completion of the project work.

Receivables management helps prevent overdue payment or non-payment. It is therefore a

quick and effective way to strengthen the company's financial or liquidity position and it is
important for both individuals and companies.

This project report will help us to enhance the knowledge regarding various concepts of
receivable management.

SHIVANI THAKUR
 INDEX

CHAPTER CONTENT PAGE NO.

NO.
CHAPTER 1 INTRODUCTION TO THE TOPIC 1-6

CHAPTER 2 INDUSTRY PROFILE AND 7-21

COMPANIES PROFILE

CHAPTER 3 REVIEW OF LITERATURE 22-33

CHAPTER 4 RESEARCH METHODOLOGY 34-39

 OBJECTIVES OF THESTUDY
 SCOPE OF THESTUDY
 RESEARCHDESIGN
 METHODSOFDATACOLLECTION
 DATA ANALYSISMETHODS
 LIMITATIONS OF THESTUDY
CHAPTER 5 DATA ANALYSIS AND 40-48
INTERPRETATION

CHAPTER 6 CONCLUSIONS AND SUGGESTIONS 49-52

CHAPTER 7 BIBLIOGRAPHY 53-54

ANNEXURE 55-64
 Annual Reports of the selected
companies
 CHAPTER-1
INTRODUCTION
TO THE
TOPIC

1
Receivable Management

Receivable Management or Managing Accounts Receivables means collecting the payments

due for Sales in a timely manner. When we sell any services, products or solutions to our
clients or customers, they owe us the money. Collecting that money is called Receivables
Management.

In Accounting terms Our Customers who owe us money are called as “Sundry Debtors”. Yes,
they are called Debtors, because they owe us money.

In India, Management of Receivables is also known as:

Payment Collection.

Collection Management.

Accounts Receivables.

2
Objectives of Receivable Management

Inordertokeepbusinessrunning,weneedcash.ThewholepurposeorobjectiveofReceivables
Management is to keep inflow of cashhealthy.

 Collect receivables from our sundrydebtors.

 Maintain a healthy cash flow for the company, so that it can pay ourcreditors.
 Have proper Policy for Creditmanagement.
 A working process and mechanism for managing payment follow ups and timely
collection.

Importance of Receivable Management

Better Cash Flow

All our Budgets and projections depends on how much we can spend. Predictable cash
flow enables us to manage our operations and expansionplans.

Lower Working Capital Requirements

Effective receivables management ensures that our Working Capital requirements are kept at
minimum.

Lowered Interest costs

Working capital is also fixed capital, which attracts interest. Lower Debtors will reduce our
Interest burden.

Better Bargaining with Sellers

When we are buying any goods or services, we can bargain mainly on quantity or Payment
terms. Having a good receivable management provides us with enough cash flow to bargain
effectively with our Suppliers.

3
Stop profit leakages

Incaseofthinmargins,justimaginehowmuchmoresaleswehavetodotorecoverandadjust just one

small bad-debt. Non receipt or delayed receipt is the biggest profit leakage any company
canhave.

Factors involving in Receivable management

1. The terms of credit granted to customers deemedcreditworthy.

2. The policies and practices of the firm in determining which customers are to be granted
credit.

3. The paying practices of creditcustomers.

4. The vigour of the sellers, collection policies andpractice.

5. The volume of creditsales.

4
Goals of Receivable Management

The basic goal of credit management is to maximize the value of the firm by achieving atrade
of between the liquidity (risk and profitability). The purpose of credit management is not to
maximize sales, nor to minimize the risk of bad debt. If the objective were to maximize sales,
thenthefirmwouldselloncredittoall.Onthecontrary,ifminimizationofbaddebtriskwere the aim,
then the firm would not sell on credit to anyone. In fact, the firm should manage its credit in
such a way that sales are expanded to an extent to which risk remains within an acceptable
limit. Thus, to achieve the goal of maximizing the value, the firm should manage its trade
credit. The efficient and effective credit management does help to expand sales and can prove
to be an effective tool of marketing. It helps to retain old customers and win new customers.
Well administrated credit means profitable creditaccounts.

What are we going to study in this project?

My studies imply that the hospitality industry used various accounts receivables tools in
reminding their clients. These are letters, phone, calls, credit control, sending invoices and
sending interests invoices.

PROS AND CONS OF RECEIVABLE MANAGEMENT

Pros

In truth, every business financing option has its good and bad sides. Accounts receivable
financing is no exception:
No Need for Collateral: It is a type of unsecured business financing option that does not
require any collateral in the form of assets and guarantors.

Retain Ownership of Your Business: This type of financing does not require you to giveout
part of your business ownership to acquirefinances.

Cons
Higher Costs: While it is a quick way of accessing cash for your business, it may come at
higher costs than the rates charged on other types of business loans. Remember that failure to
pay back the amount within the predetermined period will only increase the total amount that
you will be required to pay.

5
Lengthy Contracts: Some agreements can be short and viable, but others can be long and
winding than you would like. It is crucial, however, to negotiate the length of the contract
that perfectly works for you and your business.

Anyformofbusiness,whethersmallorbig,willatonepointrequirebusinesscredittosupport various
day to day operations of the business. At one point, the business may require quick money to
fix its operations. Sadly, credit access has become so tight, especially to small businesses
with many traditional lenders unwilling to offer viable help. Accounts receivable financing
can help businesses overcome those financialchallenges.

6
 CHAPTER 2
INDUSTRY
AND
COMPANIES PROFILE

7
Hospitality Industry

Itisabroadfieldandwhilemostpeoplehaveabasicideaofthetypesofbusinessesthatcount as
hospitality brands, a far smaller number are able to provide a coherent and satisfactory
explanation of what the industry is, and what it isnot.

Hospitalityindustryreferstoavarietyofbusinessesandserviceslinkedtoleisureandcustomer
satisfaction.Adefiningaspectofthehospitalityindustryisalsothefactthatitfocusesonideas of
luxury, pleasure, enjoyment and experiences, as opposed to catering for necessities and
essentials.

Myths of Hospitality Industry as the Travel Industry

The hospitality industry and the travel industry are closely connected, but there are also some
subtle differences to be aware of. On a basic level, the travel or tourism industry is concerned
with services for people who have travelled away from their usual place of residence, for a
relatively short period of time.

By contrast, the hospitality industry is concerned with services related to leisure and customer
satisfaction. This may well mean offering services to tourists, but it can also include the
provision of services to people who are not tourists, such as locals enjoying their free time, or
people coming to an area for reasons other than tourism.

There are four segments of the hospitality industry

FoodandBeverages.Thefoodandbeveragesectorwhichisprofessionallyknownbyitsinitials as
F&B is the largest segment of the hospitalityindustry.
Travel and Tourism.
Lodging.
Recreation.

Top 8 hospitality companies in India are as follows:

Hyatt Hotels Corporation.

InterContinental Hotels Group.

8
Marriott International India Pvt Ltd.
Radisson Blu Hotels.
Shangri La Hotels & Resorts.
Taj Hotels, Resorts & Palaces.
The Lalit Hotels.
The Leela Palace.

HOWEVER, MY STUDY IS GOING TO BE ON THESE 3 HOSPITALITY

COMPANIES:

Radisson Blu Hotels

The Leela Palaces

Taj Hotels Resorts & Places

RADISSON BLU HOTELS

HISTORY

The first Radisson hotel was built in 1909 in Minneapolis, Minnesota, United States. It is
named after the 17th-century French explorer, ranger and furrier Pierre-Esprit Radisson.
Carlsonexpandedthechainintooneofthetophotelcorporationsby2013.OntopofRadisson, Carlson
also owned several other brands, such as Park Inn,Park Plaza(acquired in 2000), and Country
Inns & Suites (founded by Carlson in 1986).

RadissonBluhasrootsdatingbacktotheopeningoftheSASRoyalHotelinDenmarkin1960.
Designed by Arne Jacobsenfor SAS Group, it was the world's first designer hotel. The hotel
was initially under the catering division of the group but merged with the hospitality division
to become SAS Catering and Hotels. In 1982, the hotels were spun off as a separate division,
operating under the name SAS International Hotels. and became known as SAS International
Hotels in1985.

9
Radisson Blu Aqua hotel in Chicago, United States.

In 1994, Radisson SAS was created as a partnership with Radisson and SAS International
Hotels for operations in Europe, the Middle East and Africa. By the year 2000, the brand was
operating 100 hotels.

2009 to present; Rebrand as Radisson Blu

The Radisson Blu brand first came into being in 2009 when Radisson SAS rebranded and
changed its name to Radisson Blu. The name ‘Blu’ was chosen as part of a research project to
find a new visual identity as the company looked to replace the familiar SAS blue box.

Radisson Blu entered the United States market with the opening of its first hotel in
Chicago,Illinoisin 2011. The hotel occupies part of the Aquaskyscraper developed by Studio
GangArchitects. In 2013 it opened its second location, this one connected to the Mall of
America) in Bloomington, Minnesota. In 2010, Radisson Blu was named the largest upper
upscale hotel chain in Europe.

10
 Industry ,,

Founded 1909; 111 years ago

Headquarters

Key people

Country Inn & Suites Radisson

Brands
Radisson Blu Radisson Collection Radisson Red
Park Inn by Radisson Park Plaza
Radisson Jass

Website

CONCEPT

Radisson Blu hotels are mainly located in major cities, key airport gateways and leisure
destinations. It is described as an "upper upscale" hotel brand.

11
Hotels near Delhi Airport | Radisson.

AWARDS AND HONORS

The Radisson Blu Hotels were awarded as the best Business Hotels of 2015 by the Swiss
Business Travel Awards. This new award was provided within the frame of the 'Swiss Travel
Management Forum', organized by the “Business Traveltip”, a magazine for business traveler
and frequent flyer.

COMPETITORS

The top 10 competitors in Radisson's competitive set are Hilton, Marriott, Kempinski Hotels,
Hyatt, IHG, AccorHotels, Four Seasons, Mandarin Oriental, Choice Hotels and Ritz-Carlton.

12
LEELA HOTELS

HISTORY

The Leela Hotels were founded by C P Krishnan Nair, owner of The Leela Group, which he
namedafterhiswife.Nairbought11acresoflandnearhishouseinSaharVillage,Mumbaito build his
first hotel, The Leela Mumbai, in 1986. It was the first luxuryhotel near the current
Chhatrapati Shivaji InternationalAirport.

In 1991 a second hotel was opened in Goa. The Leela Goa was designed keeping the overall
architecture of the state in mind. The luxury seaside resort has taken its inspiration from
Portuguese heritage and is spread over 75 acres of land in South Goa near by
CavelossimBeach.

In 2001 the group's first modern hotel was built with 357 rooms in the IT capital of India,
Bangalore,inspiredbytheMysorePalaceandthearchitectureofthe13thcenturyVijayanagara
empire,andissurroundedbysevenacresofgardens.TheLeelaGroupopeneditssecondresort in
2005 - The Leela Kovalam in Thiruvananthapuram. By 2009, two more properties were
addedtothisportfolio:inUdaipur(Rajasthan)andGurgaon.TheLeelaKempinskiGurgaonis the
group's first non-owned, managed property. The Leela Palace New Delhi opened in April
2011; the palace is inspired by Sir Edwin LutyensDelhi. The group opened a new hotel in
Chennaiin 2013. There are plans to open new hotels in Coimbatore, Agra, Lake Ashtamudi
(Kollam,Kerala) andJaipur.

The company has marketing alliances with US-based Preferred Hotels and Resortsand is a
memberofGlobalHotelAlliancebasedinGeneva,Switzerland.Apreviousmarketingalliance with
Germany-based Kempinskiended in October2013.

Recently in a shocking deal in October 2019, the company sold its hotel properties and
operationsaswellashotelassetslocatedinNewDelhi,Bengaluru,Chennai,UdaipurandAgra to
Canada-based Brookfield Asset Management, in a Rs 3,950 crore settlement, marking the
entry of Brookfield in India’s hospitalitymarket.

13
BUSINESS STRUCTURE

The Leela Palaces, Hotels and Resorts is the trading name of Leela Palaces and Resorts
Limited. Hotel Leelaventure Limited is the ultimate holding companyof the hotel group, and
istradedontheBombayStockExchange(BSE:500193)andNationalStockExchangeofIndia (NSE:
HOTELEELA). Hotel Leelaventure Limited is itself part of The Leela Groupbusiness
conglomerate.

AWARDS

 Travel + Leisure USA World’s Best Awards – The Leela Palaces, Hotels and Resorts
ranked the fifth best hospitality brand in the world, July2016
 Experiential Venue Awards 2017- The Leela Palaces, Hotels & Resorts wins the 'India's
Favorite Hospitality Group For MICE & Weddings', July2017

The Leela Group

:
:

Industry

Founded , India (1983)

Founder

14
 Headquarters Mumbai, India

Key people VivekNair(CMD)DineshNair

(JCMD)Rajiv Kaul (President)

Products and

Revenue ₹714crore(US$100million)
(2017)

Owner

Website

The Leela Palace Bengaluru

COMPETITORS

The top 10 competitors in The Leela's competitive set are Nashta, Taj Group, The Green Park
Hotel,Hyatt,Mc'sLunchbox,TheFirstMeal,IhanaIntiaInwardConductedTravelCompany,
Myindiavacation, Classicholidays and Green Park Hotels.

15
TAJ HOTELS

Taj Hotels

Indian Hotels Company Limited

:
:

Industry

Founded 1903; 117 years ago

Founder

Express Towers, Nariman Point,

,
Headquarters
,

India

Number of
locations 100 Hotels

16
 ()
Key people Puneet Chhatwal (MD &)

Products and

₹4,174crore
Revenue (US$590 million)(2018)

₹100.87crore
(US$14 million)(2018)

Website

ABOUT
Taj Hotels is a chain of luxury hotels and a subsidiary of the Indian Hotels Company Limited;
headquartered at Express Towers, Nariman Point in Mumbai. Incorporated by the founder of
the Tata Group, Jamsetji Tata, in 1903, the company is a part of the Tata Group, oneof India's
largest business conglomerates.Wikipedia

Parent organization: TataGroup

Customer service: 1800 111825

Founder: Jamsetji Tata

Founded: 1903

CEO: Puneet Chhatwal(6 Nov 2017–)

Headquarters: Mumbai

TajHotelsisachainofluxuryhotelsandasubsidiaryoftheIndianHotelsCompanyLimited;
headquartered at Express Towers, Nariman Point in Mumbai. Incorporated by the founder of
theTataGroup,Jamsetji Tata,in1903,thecompanyisapartoftheTataGroup,oneof India's largest
business conglomerates. The company employed over 20,000 people in the year2010.

17
As of 2018, the company operates a total of 100 hotels and hotel-resorts, with 84 across India
and 16 in other countries, including Bhutan, Malaysia, Maldives, Nepal, South Africa, Sri
Lanka, UAE, UK, USA and Zambia.

HISTORY

Jamsetji Nusserwanji Tata(1839–1904), founded the Tata Group

JamsetjiNusserwanjiTata,founderoftheTataGroup,openedtheTajMahalPalace,ahotelin
Mumbai(formerlycalledBombay)overlookingtheArabianSea,on16December1903.Itwas
thefirstTajpropertyandthefirstTajhotel.ThereareseveralanecdotalstoriesaboutwhyTata opened
the Taj hotel. According to a story, he decided to open the hotel after an incident involving
racial discrimination at the Watson's Hotelin Mumbai, where he was refused entry as the
hotel permitted only Europeans.[8]Hotels that accepted only European guests were very
common across British Indiathen. According to another story, he opened the hotel when one
of his friends expressed disgust over the hotels that were present in Bombay then. But a more
plausible reason was advanced by Lovat Fraser, a close friend of the Tata and one of the early
directors of the IHCL group, that the idea had long been in his mind and that he had made a
study on the subject. He did not have any desire to own a hotel but he wanted to attractpeople
to India and to improve Bombay. It is said that Jamsetji Tata had travelled to places like
London, Paris, Berlin, and Düsseldorf to arrange for materials and pieces of art, furniture and
other interior decor for his hotel. [9]The Taj group has since then developed and flourished,
under the TataGroup.

18
The Taj Mahal Palacein Mumbaiis the first hotel of Taj, opened in the year 1903.

In 1974, the group opened India's first international five-star deluxe beach resort, the Fort
AguadaBeachResortinGoa.In1970s,theTajGroupalsobeganitsbusinessinmetropolitan hotels,
opening the five-star deluxe hotel, Taj Coromandelin Chennai, in 1974, acquiring an equity
interest and operating contract for the Taj President (now Vivanta by Taj – President), a
business hotel in Mumbai, in 1977, and also opening the Taj Mahal Hotelin Delhi in1978.

The group has been converting royal palaces in India into luxury hotels since the 1970s. The
first palace to be converted into a Taj luxury hotel was the Lake Palacein Udaipur, in 1971.
Other examples include the Rambagh Palace in Jaipur,Umaid Bhawan Palace in Jodhpur,
Falaknuma Palacein Hyderabadand Nadesar Palace in Varanasi.

19
A part of the Umaid Bhawan Palacein Jodhpuris a Taj luxury hotel and it is a member of the
Leading Hotels of the World.

In 1980, the Taj group opened its first hotel outside India, the Taj Sheba Hotel in Sana'a, in
Yemenand in the late 1980s, acquired interests in the St. James' Court Hotel (nowcomprising
Taj51BuckinghamGateSuitesandResidencesandSt.James'Court,ATajHotel)inLondon. In
1984, the Taj group acquired, under a license agreement, each of the Taj West End in
Bangalore,TajConnemara(nowVivantabyTaj–Connemara)inChennaiandSavoyHotelin Ooty.
With the opening of the Taj West End in Bangalore, the Taj Group made its foray into
Bangalore. The five-star deluxe hotel, Taj Bengal in Kolkata, was opened in the year 1989,
and with this, the Taj group became the only hotel chain in India with a presence in the six
major metropolitan cities of India, namely Mumbai, Delhi, Kolkata, Bangalore, Hyderabad,
andChennai.

Concurrently with the expansion of its luxury hotel chain in the major metropolitan cities, the
Taj Group also expanded its business hotels division in the major metropolitan and large
secondary cities in India. During the 1990s, the Taj Group continued to expand its geographic
andmarketcoverageinIndia.Itdevelopedspecializedoperations(suchaswildlifelodges)and
consolidated its position in established markets through the upgrading of existing properties
and development of new properties. Taj also set up the Taj Kerala Hotels and Resorts Limited
in the early 1990s along with the Kerala Tourism DevelopmentCorporation.

Ten hotels of the Taj group are members of the Leading Hotels of the World.

Notable hotels

Two hotels of the Taj group, namely Rambagh Palacein Jaipur and the Taj Mahal Palace
&Towerin Mumbai, were ranked in 2013 by Condé Nast Traveleramong its "Top 100 Hotels
and Resorts in the World".[12]In late 2013, the Indian Traveller magazine ranked Taj
LakePalace in Udaipur and Taj Exotica Resort & Spa in Maldives as numbers 34 and 98,
respectively,onitslistof"100BestHotels&Resorts".[13]CondéNastTraveleralsorankedthe
TajMahalPalaceinMumbaiasnumber13onits listof"GoldStandardHotels"in2014.[14]In 2005, a
famous luxury hotel in New York city, The Pierre wasacquired.

20
Other ventures

 InstituteofHotelManagement,Aurangabad–IHCLhasbeenoperatingtheInstituteof Hotel
Management at Aurangabad since 1993. The institute offers a four-year degree,
designed with the help of faculty from the hospitality background with an affiliationto
theUniversity of Huddersfieldin the UnitedKingdom.
 Taj Air – IHCL operates Taj Air, anair chartercompany.

 Luxury Five Star Hotels,Resorts

COMPETITORS

Thetop10competitorsinTajGroup'scompetitivesetareHyatt,ChoiceHotels,FourSeasons, IHG,
Hilton, Ritz-Carlton, Marriott, Host Hotels & Resorts, Mandarin Oriental and
AccorHotels.Togethertheyhaveraisedover3.8Bbetweentheirestimated536.8Kemployees.

21
 CHAPTER 3
REVIEW OF
LITERATURE

22
INTRODUCTION

Accounts receivable represent the amount due form customers (book debts) or debtors as a
result of selling goods on credit. “The term debtors is defined as ‘debt’ owned to the firm by
customersarisingfromsaleofgoodsorservicesintheordinarycourseofbusiness.”Thethree
characteristicsofreceivablestheelementofrisk,economicvalueandfuturityexplainthebasis and
the need for efficient management of receivables. The element of risk should be carefully
analysed. Cash sales are totally riskless but not the credit sales, as the same has yet to be
received. To the buyer the economic value in goods and services process immediately at the
time of sale, while the seller expect an equivalent value to be received later on. The cash
payment for goods and services received by the buyer will be made by him in a future period.
The customer from whom receivables or book debts have to be collected in future are called
Tradedebtorandrepresentthefirm’sclaimonassets.Receivablesmanagement,alsotermedas
creditmanagement,dealswiththeformulationofcreditpolicy,intermsofliberalorrestrictive,
concerning credit standard and credit period, the discount offered for early payment andthe

collectionpolicyandproceduresundertaken.Itdoessoinsuchawaythattakentogetherthese policy
variables determine an optimal level of investment in receivables where the returnon

that investment is maximum to the firm. The credit period extended by business firm usually
ranges from 15 to 60 days.When goods are sold on credit, finished goods get converted

into accounts receivable (trade debtors) in the books of the seller. In the books of the buyer,
the obligation arising from credit purchase is represented as accounts payable (trade

creditors). “Accounts receivable is the total of all credit extended by a firm to its customer.”

A firm’s investment in account receivable depends upon how much it sells on credit and how
long it takes to collect receivable. Accounts receivable (or sundry debtors) constitute

the 3rd most important assets category for business firm after plant and equipment and
inventoriesandalsoconstitutethe2ndmostimportantcurrentassetscategoryforbusinessfirm
afterinventories.

Poor management of accounts receivables are: neglect of various overdue account, sharp rise
in the bad debt expense, and the collection of debts expense and taking the discount by
customers even though they pay after the discount date and even after the net date. Since
accounts receivable represent a sizable investment on the part of most firms in the case of

23
publicenterprisesinIndiaitforms16to20percentofcurrentassets.Efficientmanagementof these
accounts can provide considerable saving to thefirm.

Goals of Receivable Management

The basic goal of credit management is to maximize the value of the firm by achieving atrade
off between the liquidity (risk and profitability). The purpose of credit management is not to
maximize sales, nor to minimize the risk of bad debt. If the objective were to maximize sales,
thenthefirmwouldselloncredittoall.Onthecontrary,ifminimizationofbaddebtriskwere the aim,
then the firm would not sell on credit to anyone. In fact, the firm should manage its credit in
such a way that sales are expanded to an extent to which risk remains within an
acceptablelimit.Thustoachievethegoalofmaximizingthevalue,thefirmshouldmanageits trade
credit. The efficient and effective credit management does help to expand sales and can prove
to be an effective tool of marketing. It helps to retain old customers and win new customers.
Well administrated credit means profitable credit accounts. The objectives of receivable
management is to promote sales and profits until that point is reached where the return on
investment is further funding of receivables isless

than the cost of funds raised to finance that additional credit. Granting of credit and its
management involve costs. To maximize the value of the firm, these costs must be controlled.
These thus include the credit administration expanses, b/d losses and opportunity costs of the
funds tied up in receivable. The aim of credit management should be to regulate and control
these costs, not to eliminate them altogether. The cost can be reduced to zero, if no credit is
granted. But the profit

foregoneontheexpectedvolumeofsalesarisingduetotheextensionofcredit.Debtorsinvolve funds,
which have an opportunity cost. Therefore, the investment in receivables or debtors should be
optimized. Extending liberal credit pushes sales and thus results in higher
profitabilitybuttheincreasinginvestmentindebtorsresultsinincreasingcost.Thusatradeoff
shouldbesoughtbetweencostandbenefitstobringinvestmentindebtorsatanoptimumlevel.
Ofcoursethelevelofdebtors,toagreatextentisinfluencedbyexternalfactorssuchasindustry norms,
level of business activity, seasonal factors and the degree of completion. But there are a lot of
internal factors include credit terms, standards, limits and collection procedures. The internal
factors should be well administered to optimize the investment indebtors.

24
Credit Management

In order that the credit sales are properly managed it is necessary to determine following
factors:

1. CreditPolicy

2. Credit Evaluation of Individual Buyers

3. Credit SanctionDecisions

4. Control and Monitoring ofReceivables

Credit Policy

The first stage of credit sales is to decide policy in which most important variable is whether
creditsalesshouldbemadeornotandifyestowhatextenti.e.whatpercentageofsalesshould be done
on cash and what percentage on credit. The discussion with cement companies
marketingandfinancedepartmentclearlysuggestthatthecreditpolicyismoredependentupon
market forces and less on company specially in periods when there is excessive competition
which has happened a number of times in the history of industry after decontrol and
manufactures have been forced to provide credit if they wanted full utilization of capacity. If
inthemarketthereispracticeofprovidingcredit,thosecompanieswhodonotfallinlinehave
lowersalesandsolowerutilizationofinstilledcapacity.Themanagementhastoweighwhether it
should avoid risk of realization and problem of arranging funds for larger sales on credit or
decide for reduced capacity utilization thereby resulting in higher cost. Actually the policy
should be based on cost benefit analysis of these factors but often policy is decided without
detailedcalculations.Inactualpracticewhenonewaitstopushsalesthemarketingdepartment
pressurizes the management to provide liberal credit to buyers to realize salestargets.

Credit Rating

The second virtual point of credit policy is to whom to give credit and whom it should be
denied.Whetheritshouldbegiventoeveryoneoronselectivebasis?Asperstandardsonecan workout
impact of credit sales on profits by followingformulae:

∆P = ∆S (1-V) – K * ∆I – B, ∆S

in the above formula

25
∆P = Change in profit

∆S = Change in sales

V = Ratio of variable cost to sales

K = Cost of capital i.e. interest cost of credit

∆I = Increase in receivables

investment B = Bad debts ratio on

additional sales

The change in profits (∆P) is dependent upon ratio of variable cost and fixed cost and change
insales.Thefigureisworkedoutbydeductingvariablecostfromsalesi.e.salesminusvariable cost is
change inprofits.

The above formula appears to be very simple but for policy purposes it requires that policy
makershouldbeabletoestimatepreciselytheimpactofcreditonsalesvalue,thevariablecost and bad
debts besides the cost of capital. In practice besides the cost of capital, it is very
difficulttomeasureextentofincreaseinsalesasaresultofcreditanditisonlybroadestimate
ofsalesdepartment.Similarly,itisverydifficultifnotimpossibletoworkoutlikelybaddebts.
Thevariablecostcanbeworkedoutwithgreatprecisionifpropercostingsystemismaintained.
Because of difficulties in

quantifying various variables in the formulae often credit policy is decided without working
detailsonprevailingmarketconditionsandtheneedofthecompanytopushsalesatapointof time. It
has been by various companies that no details areworked.

Credit Period

The credit period is the time length for which seller agrees to provide credit to the buyers. It
variesaccordingtothepracticeoftradeandvariesbetween15to60days.Insomecasesforan early
payment pre-agreed discount is given to induce buyer make an early payment. For late
payment in the agreement there is provision for interest payment by buyer. If credit is given
for longer period it induces to push up sales but this is true only when one provides longer
period credit than competitors. The customer-distributor, dealer, consumers is attracted to a
firmwhoprovideslongerperiodcredit.Theimpactofcreditonprofitsandsalescanbeworked out
from the followingformula:

26
∆P= ∆S (1-V)*K*∆1-b, ∆S

27
The various components are as under :

∆ P= Change in profit

∆ S= Change in sales

∆ 1= Change in investments receivables

V= Ratio of variable cost to sales

K= Cost of giving credit

b= bad debits ratio to increased credit

The discussion with the industry suggests that they rarely take decision on period of credit
based on formula. It is market conditions and practices in the trade, which decides the period
of credit and hardly any calculations of cost are done. In practice it is marketing department
whoseadviceplaysanimportantanddecidingrole.Intheperiodwhensaleshavetobepushed
upmorecreditisprovidedandthereisnouniformpolicyovertime.Duringrainyseason(July- Sep.)
when demand is generally slack more liberal credit is granted than rest of the year. Further,
when stocks accumulate due to sluggish sales, producers accept the terms of their
customersandtradersabouttheperiodofcreditbutwhenmarketconditionsaretight,theseller
becomes more strict in providingcredit.

Optimum Credit Policy

Creditpolicyreferstothosedecisionvariablesthatinfluencetheamountoftradecrediti.e.the
investment in receivables. The firm’s investment in receivable are affected by general
economic conditions, industry norms, pace of technological change, competition etc. Though
the firm hasno

control on these factors, yet they have a great impact on it and it can certainly influence the
level of trade credit through its credit policy within their constraints imposed externally. The
purposeofanycommercialenterpriseistheearningofprofit.Credititselfisutilizedtoincrease sales,
but sales must return a profit. Further, whenever some external factors change, the firm can
accordingly adopt its credit policy. R.J. Chambers says, “The responsibility to administer
credit and collection policies may be assigned to a financial executive or marketing executive
or both of them jointly depending upon the original structure and the objectives of thefirm.”

28
Different types of credit policy are:

1. LooseorExpansiveCreditPolicy–Firmsfollowingthispolicytendtoselloncredit to
customers very liberally. Credits are granted even to those whose credit worthiness is not
proved, not known and aredoubtful.

Advantages of Loose or Expansive Credit Policy:

(i) Increase in Sales (highersales),

(ii) Increase in profit (higherprofit),

Disadvantages of Loose or Expansive Credit Policy:

(i) Heavybad/debts.

(ii) Problem ofliquidity

(iii) Increase in cost of creditmanagement.

2. TightorRestrictiveCreditPolicy–Firmsfollowingthispolicyareveryselectivein
extendingcredit.Theyselloncredit,onlytothosecustomerswhohadprovedcreditworthiness.

Advantages of Tight of Restrictive Credit Policy:

(i) Minimizecost.

(ii) Minimize chances of baddebts.

(iii) Higher sales in longrun.

(iv) Higher profit in longrun.

(v) Do not pose the serious problem ofliquidity.

Disadvantages of Tight or Restrictive Credit Policy:

(i) RestrictSales.

(ii) Restrict ProfitMargin.

Benefits of Credit Extension:

(i) Increases the sales of thefirm.

29
(ii) Makes the credit policy liberal.

(iii) Increase the profits of thefirm

(iv) The market value of the firms share wouldrise.

Cost of Credit Extension:

(i) Bad debtlosses

(ii) Production and sellingcost.

(iii) Administrativeexpenses.

(iv) Cash discounts and opportunitycost.

Cost Benefit Trade off Profitability

Aspects of Credit Policy:

(i) Creditterms

(a) CreditPeriod

(b) Cash Discounts

(ii) CreditStandard

(iii) Collection policy or collectionefforts.

(i) Credit terms – The stipulations under which the firm sells on credit to its customers are
called creditterms.

(a) CreditPeriod–Thetimedurationforwhichcreditisextendedtothecustomersisreferred to as
credit period. It is the length of time for customers under which they are allowed to pay
fortheirpurchases.Itisgenerallyvariesbetween15-60days.Whenafirmdoesnotextendany
creditthecreditperiodwouldobviouslybezero.Itisgenerallystatedintermsofanetdate,for
example,iffirmallows30daysofcreditwithnodiscounttoinduceearlypaymentscreditthen its
credit terms are stated at ‘net 30’. Usually the credit period of the firm is governed by
industry norms, but firms can extend credit for longer duration to stimulate sales. If the firm’s
baddebtsbuildup,itmaytightenupitscreditpolicyasagainsttheindustrynorms.According to
Martin H. Seidhen, “Credit period is the duration of time for which trade credit isextended.
During this period the overdue amount must be paid by the customer. The length ofcredit

30
period directly affects the volume of investment in receivables and indirectly the net worth of
thecompany.Alongcreditperiodmayblastsalesbutitalsoincreaseinvestmentinreceivables and
lowers the quality oftradecredit.”

(b) Cash Discounts – It is the another aspect of credit terms. Many firms offer to grant cash
discount to their customers in order to induce them to pay their bill early. The cash discount
terms indicate the rate of discount and the period for which discount has been offered. If a
customer does not avail this offer, he is expected to make the payment by the net date.In

the words of Martin H. Seiden “Cash Discount prevents debtors from using trade credit as a
source of Working Capital.”

(ii) Credit Standard - The credit standard followed by the firm has an impact of sales and
receivables. The sales and receivables level are likely to be high, if the credit standard of the
firm are relatively low. In contrast, if the firm has relatively low credit standard, the sales and
receivableslevelareexpectedtoberelativelyhigh.Thefirmscreditstandardareinfluencedby three
“C” of credit. (a) Character – the willingness of the customers to pay, (b) Capacity – the
ability of the customers to pay, and (c) Condition – the prevailing economicconditions.

Normally a firm should lower its credit standards to the extent profitability of increased sales
exceed the associated costs. The cost arising due to credit standard realization are
administrative cost of supervising additional accounts and servicing increased volume of
receivables, bad debt losses, production and selling cost and cost resulting from the slower
averagecollectionperiod.Theextenttowhichcreditstandardcanbeliberalizedshoulddepend
uponthematchingbetweentheprofitsarisingduetoincreasedsalesandcosttobeincurredon the
increasedsales.

(iii) Collection policy- This policy is needed because all customers do not pay the firm’s bill
in time. There are certain customers who are slow payers and some are non-payers. Therefore
the collection policy should aim at accelerating collections from slow payers and non-payers
and reducing bad debt losses. According to R.K. Mishra, “A collection policy should always
emphasize promptness, regularity and systematization in collection efforts. It will have a
psychological effect upon the customers, in that, it will make them realize the attitude of the
seller towards the obligations granted.” The collection programme of the firm aimed at timely
collection of receivables, any consist of many things like monitoring the state of receivable,
despatchoflettertocustomerswhoseduedateisapproaching,telegraphicandtelephoneadvice to
customers around the due date, threatof

31
legalactiontooverdueaccounts,legalactionagainstoverdueaccounts.Thefirmhastobevery
cautious in taking the steps in order to collect from the slow paying customers. If the firm is
strict in its collection policy with the permanent customers, who are temporarily slow payers
due to their economic conditions, they will get offended and may shift to competitors and the
firm may loose its permanent business. In following an optimal collection policy the firm
should compare the cost and benefits. The optimal credit policy will maximize the profit and
will consistent with the objective of maximizing the value of thefirm.

Credit Evaluation

Before granting credit to a prospective customers the financial executive must judge, how
creditworthy is the customer. In judging the creditworthiness of a customer, often financial
executive keep in mind as basic criteria the four

(i) Capital–referstothefinancialresourcesofacompanyasindicatedprimarilybythefinancial
statement of thefirm.

(ii) Capacity – refers to the ability of the customers to pay ontime.

(iii) Character – refers to the reputation of the customer for honest and fairdealings.

(iv) Collateral – represents the security offered by the customer in the form ofmortgages.

Credit evaluation involves a large number of activities ranging from credit investigation to
contact with customers, appraisal review, follow up, inspection and recovery. These activities
required decision-making skills which can partly be developed through experience but partly
it has to be learned externally. This is particularly true in area of pre-credit appraisal and
post- credit follow up.

It is an important element of credit management. It helps in establishing credit terms. In

assessing credit risk, two types of error occur – (i) A good customer is misclassified as a poor
creditrisk.(ii)Abadcustomerismisclassifiedasagoodcreditrisk.Boththeerrorsarecostly.
Type(i)leadstolossofprofitonsalestogoodcustomerwhoaredeniedcredit.Type(ii)leads
inbaddebtlossesoncreditsalesmadetoriskycustomer.Whilemisclassificationerrorscannot be
eliminated wholly, a firm can mitigate their occurrence by doing proper creditevaluation.

Three broad approaches used for credit evaluation are:

A. Traditional Credit Analysis - This approach tocredit

32
analysis calls for assuming a prospective customer in terms of 5

of credit: (i) Character, (ii) Capacity, (iii) Capital, (iv) Collateral,

and (v) Conditions.

To get the information on the 5 firm may rely on the following.

1. Financialstatements

2. Bankreferences

3. Tradereferences

4. Creditagencies

5. Experience of thefirm

6. Prices and yields onsecurities

B. SequentialCreditAnalysis–Thismethodismoreefficientmethodthanabovemethod.In this
analysis, investigation is carried further if the benefits of such analysis outweighs itscost.

C. Numerical Credit Scoring – This system involves the followingsteps.

1. Identifying factors relevant for creditevaluation.

2. Assign weights to these factors that reflect their relativeimportance.

3. Rate the customer on various factors, using a suitable rating scale (usually a 5 pt. Scale or a
7pt. Scale isused).

4. For each factor, multiply the factor rating with the factor weight to get the factorscore.

5. Add all the factors score to get the overall customer ratingindex.

6. Based on the rating index, classify the ratingindex.

D. Discriminant Analysis - The credit index described above is somewhat ad hoc in nature
andisbasedonweightwhicharesubjectiveinnature.Thenatureofdiscriminateanalysismay
beemployedtoconstructabetterriskindex.Underthisanalysisthecustomersaredividedinto
twocategories:

1. who pay the dues(X)

2. who have defaulted(O)

33
The straight line seems to separate the x’s from o’s, not completely but does a fairly good job
of segregating the two groups. The equation of this straight line is Z = 1 Current Ratio + 0.1
returnonequityAcustomerwithaZscorelessthan3isdeemedcreditworthyandacustomer
withaZscorelessthan3isconsiderednotcreditworthyi.e.thehighertheZscorethestronger the
creditrating.

Risk Classification Scheme

On the basis of information and analysis in the credit investigation process, customers may be
classified into various risk categories.

Risk Categories Description

1. Customers with no risk ofdefault

2. Customer with negligible risk of default (<2%)

3. Customer with less risk of default (2% to5%)

4. Customer with some risk of default (5% to10%)

5. Customer with significant risk of default (>10%)

Credit Granting Decision

Afterassessingthecreditworthinessofacustomer,nextstepistotakecreditgrantingdecision.

34
 CHAPTER-4
RESEARCH
METHODOLOGY

35
MEANING OF RESEARCH

Research is a process in which the researchers wish to find out the end result for a given
problem and thus the solution helps in future course of action. The research has been defined
as “A careful investigation or enquiry especially through search for new facts in branch of
knowledge.”

Knowledge of research not only helps one to look at the available information, but this
knowledge also helps in other ways.

Research comprises defining and redefining problems, formulating hypothesis or suggested

solutions, collecting, organizing and evaluating data, making deductions and reaching
conclusions.

Research compromises “creative work undertaken on a systematic basis in order to increase

the stock of knowledge, including knowledge of man, culture and society, and the use of this
stock of knowledge to devise new applications.”

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. The research
methodology included various methods and techniques for conducting a research. “Marketing
Research is a systematic design, collection, analysis, and reporting of data and finding
relevant solution to a specific marketing situation or problem.”

Sciences define research as “ the manipulation of things, concepts or symbols for the purpose
of generalizing to extend, correct or verify knowledge, whether that knowledge aids in
construction of theory or in practice of an art.” Research is thus, an original contribution to
the existing stock of knowledge marketing for its advancement, the purpose of research is to
discover answers to the questions through the application of scientific procedure.

My research project has a specified framework for collecting the data in an effective manner.
Such framework is called “Research Design”.

36
OBJECTIVES OF THE STUDY

 To know about the debtors position of the selected three companies of hospitality
industry.
 To know about the receivables management position by analyzing debtors turnover
ratio of the selected threecompanies.
 To study the trade receivables position of the selected threecompanies.
 To know about the provision for bad debts of the selected threecompanies.

SCOPE OF THE STUDY

This study is confined with the management of receivables of the hospitality industry.

RESEARCH DESIGN

A research design is a framework or blueprint for conducting the research project. It gives
details of the procedures necessary for obtaining the information needed to structure or solve
research problem. Mainly there are three types of research design discussed below :-

1. EXPLORATORY STUDY– An exploratory study is undertaken when no

information is available on how similar problems or research issues have been solved in
the past. In such cases, extensive interviews have to be undertaken with many people to
understand and handle theproblem.

2. DESCRIPTIVE STUDY – A descriptive study is undertaken in order to ascertain

and be able to describe the characteristics of the variable of interest in a situation. Descriptive
study are also undertaken to understand the characteristics of organizations that follow
certain commonpractices.

3. HYPOTHESIS TESTING– Studies that involve in hypothesis testing

usually explain that the difference among groups or the independence of two or more
factors (variables) in asituation.

The research design used in this project is Descriptive in nature. The procedure used in this
research use facts or information already available, and analysis these to make a critical
evaluation of the performance.

37
METHODS OF DATA COLLECTION

Data collection is the process of gathering and measuring information on variables of interest,
in an established systematic fashion that enables one to answer stated research questions, test
hypothesis, and evaluate outcomes.

The data collection component of research is common to all fields of study including physical
and social sciences, humanities, business etc. While methods vary by discipline, the emphasis
on ensuring accurate and honest collection remains the same.

The goal for all data collection is to capture quality evidence that then translates to rich data
analysis and allow the building of a convincing and credible answer to questions that have
been posed.

There are two types of data collection methods:

1. PRIMARYDATA

2. SECONDARYDATA

I used Secondary Data in this Study.

1. By going through annual reports of the selectedcompanies

2. By going through the material published on the websites.

SECONDARY DATA- Secondary data analysis saves time that would otherwise be
spent collecting data and, particularly in the case of quantitative data, provides larger and
higher-quality databases that would be unfeasible for any individual researcher to collect
on their own.

In addition, analysts of social and economic change consider secondary data essential, since it
is impossible to conduct a new survey that can adequately capture past change and/or
developments.

The secondary data means data that are already available in various reports, diaries, letters,
books, periodicals etc.

The secondary data are those, which have been used previously for any research and now
used for second time.

38
Desk review has been conducted to collect data from various secondary sources. This
includes reports and project documents at each manufacturing sectors (more on medium and
large level). Secondary data sources have been obtained from literatures regarding OSH, and
the remaining data were from the companies’ manuals, reports, and some management
documents which were included under the desk review.

DATA ANALYSIS

In this study data analysis is done with the help of various graph and tables.

The data also obtained from the existing working documents, manuals, procedures, reports,
statistical data, policies, regulations, and standards were taken into accounts for the review.

LIMITATIONS OF THE STUDY

The study is conducted in short period. The time period of study has been limited to less than
82 days. The period is small to study the practical Accounts receivable decisions of the
companies. It does not consider all the new unapproved schemes.

 The time was short that lockdown had become all over India due tocovid-19
 I was able to give less time to my study because collegeclasses
 Measure used to collect the data sometimes it is the case that, after completing
interpretation of the findings, we discover that the way in which we gathered data
inhibited our ability to conduct a thorough analysis of theresults.
 Management of the receivables requires the specified skills of the person managingit.

SIGNIFICANCE OF THE STUDY

This study will be useful to the hospitality industry in its management of accounts receivables
which affects the working capital management and very often forces the hotel industry to
seek costly alternative sources of finance. These alternative sources are either loans or
overdraft facilities which would otherwise not be necessary, or would be required at reduced
levels if the book values of the accounts receivables were reduced to minimal levels. This
study will help in the identification of the factors most significant in the management of
accounts receivables in the hotel industry to ensure the most effective and efficient
management. This study can as well be used in other industries similar to the hotels intheir

39
management of accounts receivables. This study can help the hotel industry save heavy
financing and staffing costs. This study can prompt researchers and scholars to further
explore this area of receivables management in the hospitality industry.

40
 CHAPTER 5
DATA ANALYSIS
AND
INTERPRETATIO
N

41
1. Sundry Debtors of the selected Hospitalitycompanies.

Name of the company Sundry Debtors (in lakhs)

Taj Hotels Resorts & Places 1934

The Leela Palaces 1888

Radisson Blu Hotels 1609

Sundry Debtors (in lakhs)

2500

2000

1500

1000

500

0
Taj Hotels The Leela Radisson Blu

Sundry Debtors

Interpretation: In table 1 and Figure 1 shows that sundry debtors of Taj Hotels Resorts and
Places are having 1934 Debtors which is highest among selected companies. Radisson Blu
Hotels are holding 1609 debtors in lakhs which is also a quiet good number but still the
lowest. Businesses use an account to track these transactions and they are called as Sundry
Debtor account or Accounts Receivable. As Customers who owe you money for goods or
services that you have supplied are your debtors. The balance between when you need to pay
your creditors and when you receive payment from your debtors has a major effect on the
cash flow of your business. So, it is required to control and to manage debtors.

42
2. Bad Debts of the selected HospitalityCompanies.

Name of the company Bad Debts (in lakhs)

Taj Hotels Resorts & Places 108
The Leela Palaces 876
Radisson Blu Hotels 902

Bad Debts (in lakhs)

1000
900
800
700
600
500
400
300
200
100
0

Taj Hotels The Leela Radisson Blu

Bad Debts (in lakhs)

Interpretation: In the above Table No. 2 and Figure 2 Graph represents the Bad Debts of
selected hospitality companies where Taj is holding lowest no. of Bad Debts among other
companies. The Company having highest Bad Debts is Radisson Blu Hotels. Bad debts
expense is related to a company's current asset accounts receivable. Bad debts expense is also
referred to as uncollectible accounts expense or doubtful accounts expense. In business, bad
debt is the portion of a loan or portfolio of loans a lender considers to be uncollectable. In
personal finance, bad debt generally refers to high-interest consumer debt.

43
3. Provision for Bad Debts of the selected Hospitalitycompanies.

Name of the company Provision (in lakhs)

Taj Hotels Resorts & Places 25
The Leela Palaces 22
Radisson Blu Hotels 11

Provision for bad debts (in lakhs)

30

25

20

15

10

Taj Hotels The Leela Radisson Blu

Provision for bad debts (in lakhs)

Interpretation: In the above table 3 and figure 3 shows that provision of bad debts each
company is holding to save themselves from loses. Taj Hotel is holding 25 lakhs rupees,
where The Leela Palaces and Radisson Blu are holding 22 lakhs and 11 lakhs respectively.
The provision for bad debts is an estimate of the debts owed to us that will go bad in the
future. We record this future loss of debts as soon as we are aware that we will definitely lose
money in the future.

44
4. Debtors Turnover Ratio of the selected Hospitalitycompanies.

Name of the company Debtors Turnover Ratio

Taj Hotels Resorts & Places 16.68
The Leela Palaces 2.09
Radisson Blu Hotels 9.04

Debtors Turnover Ratio

18
16
14
12
10
8
6
4
2
0

Taj Hotels The Leela Radisson Blu

Debtors Turnover Ratio

Interpretation: In the above Table no. 4 and Figure 4 shows the debtor turnover ratio of
each selected hospitality company. Where Taj Hotel is holding 16.68 debtor turnover ratio
which is the highest ratio among other two selected companies. Whereas, The Leela Palaces
holding lowest debtor turnover ratio which is 2.09. Radisson Blu is in middle of other two
selected companies holding 9.04 debtor turnover ratio. Hence, Receivable Turnover Ratio or
Debtor's Turnover Ratio is an accounting measure used to measure how effective a company
is in extending credit as well as collecting debts. The receivables turnover ratio is an activity
ratio, measuring how efficiently a firm uses its assets.

45
5. Trade Receivables of the selected Hospitalitycompanies.

Name of the company Trade Receivables (in lakhs)

Taj Hotels Resorts & Places 1934.23
The Leela Palaces 8254.91
Radisson Blu Hotels 5152

Trade Receivables (in lakhs)

9000
8000
7000
6000
5000
4000
3000
2000
1000
0

Taj Hotel The Leela Radisson Blu

Trade Receivables (in lakhs)

Interpretation: In the above Table No. 5 Figure 5 shows Trade Receivables each company is
holding according to year 2019. The Taj Hotel is holding 1934.23 lakhs trade receivables
which is lowest among other two selected companies. The Leela Palace is holding the highest
no. of trade receivables which is 8254.91 lakhs whereas; Radisson Blu is holding 5152 lakhs
trade receivables. Trade receivables are amounts billed by a business to its customers when it
delivers goods or services to them in the ordinary course of business. These billings are
typically documented on formal invoices, which are summarized in an accounts receivable
aging report. The term trade receivables refer to any receivable generated by selling a product
or providing a service to a customer.

46
6. Current Assets of the selected Hospitalitycompanies.

Name of the company Current Assets (in lakhs)

Taj Hotels Resorts & Places 58970.22
The Leela Palaces 18229.30
Radisson Blu Hotels 12856.80

Current Assets (in lakhs)

70000

60000

50000

40000

30000

20000

10000
Taj Hotel The Leela Radisson Blu
0
Current Assets (in lakhs)

Interpretation: According to Table No. 6 and Figure 6 shows Taj Hotel have largest no. of
Current Assets is 58970.22 in lakhs according to year 2018 and The Leela Palaces have
18229.30 in lakhs and Radisson Blu Hotels have 12856.80 lakhs. Current asset is any asset
which can reasonably be expected to be sold, consumed, or exhausted through the normal
operations of a business within the current fiscal year or operating cycle.

47
7. Total Current Liabilities of the selected Hospitalitycompanies.

Name of the company Total Current Liabilities (in

lakhs)
Taj Hotels Resorts & Places 1059973
The Leela Palaces 91299.17
Radisson Blu Hotels 95906.23

Current Liabilities (in lakhs)

1200000

1000000

800000

600000

400000

200000

0
Taj Hotel The Leela Radisson Blu

Current Liabilities (in lakhs)

Interpretation: In the Table 7 and Figure 7 shows Taj Hotel have 1059973, The Leela
Palace have 91299.17 and Radisson Blu have 95906.23 lakhs.Current liabilities are often
understood as all liabilities of the business that are to be settled in cash within the fiscal year
or the operating cycle of a given firm, whichever period is longer.

48
8. Current Ratio of the selected Hospitality companies according to year
2019.

Name of the company Current Ratio

Taj Hotels Resorts & Places 0.64
The Leela Palaces 1.18
Radisson Blu Hotels 0.42

Current Ratio
1.4

1.2

0.8

0.6

0.4

0.2

Taj Hotel The Leela Radisson Blu

Current Ratio

Interpretation: In the Table No. 8 and Figure 8 shows Taj Hotel have 0.64 Current Ratio
and The Leela Palace have 1.18 and Radisson Blu have 0.42 respectively.Acceptable current
ratios vary from industry to industry and are generally between 1 and 3 for healthy
businesses. The higher the current ratio, the more capable the company is of paying its
obligations. A ratio under 1 suggests that the company would be unable to pay off its
obligations if they came due at that point.

49
 CHAPTER-6
CONCLUSIONS
AND
SUGGESTIONS

50
CONCLUSIONS

This chapter deals with a summary of the whole study and the conclusions derivedthere from.
It also gives suggestions for the improvement of the working of the employees in the tourism
industry to provide better services to the tourists, thereby improving the standard of living of
the employees in the tourism industry. Tourism is an industry where service is marketed. It
needs skilled and unskilled laborers. If the personnel associated with tourism are trained
properly,theservicesinthetourismindustrycanbemarketedveryeasily.Tourismisaservice
oriented business where the customers enjoy the services they arehaving.

As we can see through graphs and their data interpretation most professional travelers have
rated no. 1 rank to Taj Hotels Resorts & Places and The Leela Palaces is rated no. 10 where
RadissonBluHotelsratedno.37.Managementisalsoverygoodinselectedcompanies.Taking
Current Ratio and other receivables al the selected companies are doing fine. However, Taj
HotelsResorts&PlacesarestilltakingNo.1positionfrompast3years.Mostoftheemployees
working in tourism industry are not professionally qualified. The employees’ turnover is very
highintourismindustry.Themainreasonsfortheemployeeturnoverarethelowwagesystem, lack of
systematic work schedule and the attitude of the society towards the employees in this
industry

Tourism workers have to be provided with reasonable compensation, Job security and
Advancement, Culture and pay and benefit for their work. They should have a work schedule
like other industries. The Govt. should frame a strategy regarding the working conditions and
payment of the employees in tourism industry. The workers in the tourism industry must have
anopportunityforpresentingtheirproblemsThisstudyispresumedtoprovidethefirstcontent
analysis conducted to date that presents past research on luxuryhotels.

Although this study is more descriptive than predictive, the results can provide hospitalityand
tourism researchers and scholars with valuable insight regarding the direction of future
publishing efforts in the field. Some of the data is taken from Indeed, where Indeed has given
ratings and responses to different organizations about their work environment and job
satisfactions. The review process may also help scholars to increase methodological rigor by
identifying contemporary topic areas, methods, and direction. It also provides a resource on
influential individuals and institutions in luxury hotel research. Moreover, accumulating
knowledgefromawiderangeofresearchinasystematicreviewcanaidinthedevelopmentof

51
areliableknowledgebaseforpractitionersandpolicymakers.Thereviewprocessgivescurrent
researchers with insights into the luxury hotelindustry.

Based on the conclusions, the following suggestions are given for practice:

More conceptual studies relating luxury hotels should be conducted in order to encourage
debate, develop theories, and induce empirical research (Bowen & Sparks, 1998).

Selected Hospitality companies are doing great in their respective work environment but they
should start focusing more on their financial health. As Receivable management is very
important to each and every business hospitality companies should start advertising more
through Television Advertisements, Radio Telecast, Newspapers etc.

Most of the studies reviewed fell into three major themes: marketing, HR, and technology. It
is advised that more research should be conducted on other categories of themes including
finance,servicequality,strategicmanagement,tourismandfoodscience.Itisalsoadvisedthat
additional topics should be developed to broaden the spectrum of luxury hotelresearch.

Trends in perception of hostelling and spending pattern of individuals are changingconstantly

day by day. Many changes are derived as per the financial condition of the individuals. Those
who belong to the higher income family, the spending on luster life gets change. So the hotel
owners and or hospitality industry has to keep their eyes open and look outside the world for
recent trends in the factor of development and subject to the need of the individualcustomer.

Despitethelargenumberofstudiesthatusedquantitativemethodology,itisadvisedthatmore “how
questions” be asked so that qualitative methods can be used to better understand the luxury
hotel industry in a broader and deepersense.

Findings

During such uncertain times, the hospitality industry in India is working tirelessly and has left
no stone unturned when offering its services. Hotels are preparing fresh, packed meals for the
needyandofferinghotelroomsasquarantinecentreacrossthenation.Everyindividualisdoing
whattheyknowbest—servingtheirguestsandtheircountrytothebestoftheirabilities,while putting
their own needs on hold. The Leela hotels have collaborated with local authorities to provide
‘care packages’ consisting of daily need food provisions, personal hygiene products
alongwithfoodpackets.Thesehavebeenprovidedtomorethan200underprivilegedfamilies.

52
Taj Mahal Hotel, owned by a Tata Group firm, is providing free stay to the health workers
fighting the coronavirus pandemic. The company is also offering accommodation at its
luxury properties in the Maharashtra capital, and in Uttar Pradesh's Noida.

"These rooms will be available across 7 of our hotels, namely Taj Mahal Palace, Taj Lands
End, Taj Santacruz, The President, Ginger MIDC Andheri, Ginger Madgaon and Ginger
Noida," it added.

53
 CHAPTER-7
BIBLIOGRAPHY

54
REFERENCE BOOKS

 Pandey I. M. Financial Management, New Delhi, Vikas Publishing House Private

Limited,1999, 8thedition,807-809pp.
 Kumar Dhagat Anil, FINANCIAL MANAGEMENT
 Guilding Chris, Financial Management for Hospitality DecisionMakers

IMPORTANT LINKS AND WEBSITES

www.google.comwww.b
ing.comwww.googlesch
olar.com
https://en.wikipedia.org/wiki/Hospitality_industryhttps://study.com/academy/
lesson/hospitality-industry-definition-overview.html
https://www.thebalancesmb.com/the-pros-and-cons-of-accounts-receivable-
financing-392841
https://shodhgangotri.inflibnet.ac.in/bitstream/123456789/830/3/03_literature
%20review.pdf
https://www.intechopen.com/online-first/research-design-and-methodology
file:///C:/Users/Shivani/Downloads/epdf.pub_hospitality-financial-
management.pdfhttps://www.moneycontrol.com/financials/hotelleelaventure/
balance-sheet/HLV
www.theleela.comwww.
radissonhotels.comtaj.taj
hotels.com
https://www.radissonhospitalityab.com/static-files/7135730d-098c-497b-9991-
96dc126982ff
https://www.revfine.com/hospitality-industry/

55
ANNEXURE

56
Taj Hotels, Resorts & Palaces Annual Reports

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The Leela Palace Annual Reports

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Radisson Blu Hotels Annual Reports

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