Financial & Strategic Management Flashcards

Which financial metric measures the total revenue generated by an event minus all direct costs associated with that event?

Answer: Gross profit

Gross profit is calculated as total revenue minus direct (variable) costs, before deducting overhead or fixed expenses.

An event planner is preparing a budget and must account for costs that remain constant regardless of attendance. These are known as:

Answer: Fixed costs

Fixed costs remain unchanged regardless of event attendance volume, such as venue rental fees or speaker contracts.

When using zero-based budgeting for a meeting, the planner must:

Answer: Justify every expense from scratch each budget cycle

Zero-based budgeting requires justifying all expenditures from zero each cycle rather than using prior budgets as a baseline.

A meeting professional is conducting a post-event financial reconciliation. Which document compares actual expenditures to the approved budget?

Answer: Variance report

A variance report highlights differences between budgeted and actual figures, enabling planners to identify over- or under-spending.

Which pricing strategy sets registration fees based on what competitors charge for similar events?

Answer: Competitive pricing

Competitive pricing establishes fees by benchmarking against similar events in the market rather than solely on internal costs.

In event financial management, 'attrition' most commonly refers to:

Answer: The penalty incurred when contracted room blocks are not filled

Attrition clauses in hotel contracts require the client to pay penalties if a guaranteed minimum number of room nights is not consumed.

Which financial document provides a snapshot of an organization's assets, liabilities, and equity at a specific point in time?

Answer: Balance sheet

A balance sheet presents assets, liabilities, and equity as of a specific date, offering a financial position snapshot.