Analyze the p&l from the various perspectives. So the PnL analysis can be done in two ways. One is called horizontal and various services k means comparing the variance with your budget with your previous years or any other for any other math benchmarks. Then you have something called vertical analysis vertical analysis will bring the reader into a common size so that you can estimate the percent all the expenses into the percentage So, we're going to be learning that in the future as well. And one finally is called insurances IE like occupancy and ad or other type of ratios, which help us to make sense of the different figures. Then we also have in other aids in the revenue and expense analysis which is can be considered as market segment booking so nationality legally create pace.

Competition reports back many ways to report expense details, these are the different measures that we use normally in the p&l analysis. Let's look at it in a bit more details. Now, the horizontal analysis means we compare the two carriers. So, we need a comparative data, it can be two periods, it can be compared to the budget can compare to the forecast or can be compared to any other any other benchmark that you want to use. And it shows the absolute change in dollars or in your currency whatever currency you may be using and a percentage change between the two periods or two benchmarks. So, it will it will tell you two different things.

One is the absolute change and as a percentage of our horizontal analysis are not concrete analysis we know always has to be combined with the ratio analysis or with a vertical analysis. This is one example where we can see the difference between actual budget so in the various column you have the medians compared to The budget in dollar terms and also in percentage. So very horizontal analysis will help us to identify the key problem areas. For example, here the revenue revenue is dropping compared to budget by 36%. However, food and beverage revenue has dropped compared to the budget by 48%. So even if the room is rocking by 44 million, which is quite high compared to the food and beverage, but food and beverage is dropping faster than the distribution, which is a concern, so it helps us to identify where we need to focus but it doesn't still give you any kind of answers or any kind of other indications in how to analyze the data.

The other way was the vertical analysis often comments refer to as a common size statement. It calculating the percentage of annual revenue or individual revenue to the total revenue and then expenses are also analyzed as a reference to the two together So, here is an example, this column will be considered as common size where everything is translated into the into the hundred percent of revenue. Here you can see again the way of analyzing is different same thing again we are trying to realize here in a different perspective, we are comparing as a contribution now, the contribution of revenue is 59% compared to hundred percent, which is previous year was 54 and 37%. So, in this case we can see that the even though the room department is dropping, but their overall contribution to the total revenue is still far better or better than the previous year because of the drop in contribution from food and beverage.

So, food a marriage is some some of the really big problem here. Because of the two ways one of is dropping faster and their contribution to the total revenue is also appropriate. So this is this helps to ask to zero in focus areas where we are going to focus upon our analysis or so in this our example we will focus on loop and connect. First because those are the important matrices that we need to focus upon. If you're able to fix that we are able to cover 80 90% of our revenues which is so we are able to focus and our energies towards what is more important rather than going into other departments or other operating departments, which may take similar time but may not yield a very high returns, focusing on room and food and beverage will give us better returns. So that's how we do the overall p&l analysis.

In the future slides we're going to be looking at more details of individual line items of the PnL