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112 Cornell Quarterly
Cornell Quarterly
The Cornell Hotel and Restaurant Administration
Quarterly publishes information, research findings
and opinions and advice regarding the management
of hotels, restaurants and other hospitality
businesses. Its contents �reviewed anonymously inhouse),
intended for hospitality professionals, are
broad and include topics in marketing, finance,
human resources, international development, tourism
and general management. Its `Educators
Forum', published in the August issue, deals with
issues pertaining to hospitality research and
education. It was first published in 1960, and
now appears six times per year, published by
Elsevier �ISSN 0010±8804).
RENE BARETJE, FRANCE
corporate culture see culture, corporate
corporate finance
Corporate finance is the decision making process
concerning the source of a tourism enterprise's
funds and the allocation of its available resources in
a manner consistent with measurable financial
goals and objectives of the organisation. Measurable
financial goals of a tourism organisation are
often compared against a standard such as prior
period results, budget or industry norms. Tourism
organisations evaluate potential investments for the
purpose of obtaining a maximisation of return
measured by return on investment models.
Ratio analysis is a tool that is often used to
communicate corporate financial information to
interested parties relative to the financial goals and
objectives. Ratios can be expressed as percentages,
a per unit basis, turnovers and coverages. Ratios
are used by tourism management in corporate
finance to help determine if there is adequate cash
to meet the organisation's obligations, evaluate the
level of profits, compare the debt with the stockholder's
investment, evaluate the inventory usage,
draw relationships between the operation's earnings
and the market price of the stock, and make
judgements on the servicing of the accounts
receivable reasonable.
There are five different groups of financial ratios
used in corporate finance: liquidity ratios, which
measure the tourism firm's ability to meet short
term obligations; solvency ratios, which compute
the extent that the tourism enterprise has been
financed; activity ratios or turnover ratios, which
are used to evaluate the ability of management to
use the property's assets; profitability ratios, which
measure management's overall effectiveness in
managing the business; and operating ratios, which
are used to analyse the tourism establishment's
operations. Tourism corporate finance managers
develop ratios from income statements, cash flow
statements and balance sheet data. Income statement
information may not always be the best
measurement of profitability, and balance sheet
data may be out of date due to the cost principle.
Further reading
Coltman, M.M. �1979) Financial Management for the
Hospitality Industry, New York: Van Nostrand
Reinhold.
Schmidgall, R. �1997) Hospitality Industry Managerial
Accounting, 4th edn, East Lansing, MI: Educational
Institute of the American Hotel and Motel
Association.
corporate strategy
STEPHEN M. LEBRUTO, USA
A corporate strategy is a master game plan for
managing and operating an organisation. Its
primary function is the achievement of a firm's
mission statement, meeting the firm's objectives
and deciding what the scope or domain of the
operation should be. Through a comprehensive
and detailed strengths, weaknesses, opportunities,
and threats analysis of both internal and external
environments �see SWOT analysis), a firm will be
able to make decisions that will enable it to create a
defendable and competitive position in its operating
industry. A SWOT analysis will also provide the
company imperative information on how to adapt
to its environment. Corporate strategies, if success-