CTP Financial Management & Pricing Flashcards
6 cards from real CTP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CTP Financial Management & Pricing flashcards as text
What is a 'pro forma' financial statement used for in tour business planning?
Answer: A projected financial statement based on assumptions about future revenue and costs
Pro forma statements project future financial performance based on assumptions, helping operators plan for new tours, expansions, or investment decisions.
Why is it important for tour operators to track 'cost per acquisition' (CPA)?
Answer: To understand how much is spent on marketing to secure each new booking, ensuring marketing ROI is positive
Tracking CPA ensures that the cost of acquiring each customer through marketing doesn't exceed the profit generated from their booking.
What does 'working capital' mean for a tour operation?
Answer: Current assets minus current liabilities, representing the funds available for day-to-day operations
Working capital is current assets minus current liabilities and indicates whether a business has sufficient short-term funds to cover its immediate operational obligations.
Which of the following is an example of 'economies of scale' for a tour operator?
Answer: Negotiating lower per-unit costs for accommodation or transportation by committing to higher volume
Economies of scale allow tour operators to reduce per-unit costs by committing to larger volumes of bookings with hotels, transportation providers, or attraction venues.
What is the purpose of a 'cancellation and refund policy' from a financial management perspective?
Answer: To protect the operator from unrecoverable costs when bookings are cancelled close to departure
A clear cancellation policy protects the operator from financial losses by ensuring that costs already incurred (deposits, reservations) are partially or fully recovered when a booking is cancelled late.
What is 'contribution margin' in tour financial analysis?
Answer: Revenue per passenger minus the variable cost per passenger, showing how much each booking contributes to covering fixed costs
Contribution margin shows how much revenue from each passenger remains after covering variable costs, which then contributes toward paying fixed costs and generating profit.