Chapter Summary

This chapter focuses on all aspects of Recreation. Makes a distinction between commercial and noncommercial recreation and names various types of recreational clubs. Describes the origin of government sponsored recreation in consideration of the origin and purpose of national parks and explains the concept of recreation for special populations.  It also talks about national parks, and introduces Walt Disney.

Key Words and Concepts

1. City Clubs. My example: The Women’s City Club is a women’s club that offers a number of classes and recreation programs for women.
2. Club Management. My example: The golf club management must make sure the workers do a thorough inspection of the golf course.
3. Commercial Recreation. My example: Every Summer I like to visit new commercial recreational parks.
4. Country Club. My example: George Clooney belongs to one of the most expensive and prestigious country clubs along with many rich individuals.
5. Government-Sponsored Recreation. My example: New public libraries are opening throughout the city under the government sponsored recreational programs.
6. Heritage Tourism. My example: An example of heritage tourism is The Punta Cana Ecological Foundation in the Dominican Republic.
7. Leisure. My example: Jose doesn’t know how to relax really, and usually spends his leisure time working around the house.
8. National Park. My example: An example of a national park is Yellowstone National Park which encompasses over two million acres.
9. National Parks Service. My example: The Statue of Liberty National Monument is managed by the National Parks Service.
10. National Register of Historic Places. My example: Statistically each year approximately 30,000 properties are added to the National Register of Historic Places.
11. Noncommercial Recreation. My example: “I’m Too Young For this” is a noncommercial recreation organization that has been able to do for young adults who are living with cancer.
12. Recreation. My example: Every now and then, I play tennis for recreation.
13. Recreation for Special Populations. My example: The recreation for special populations provide year round recreational and leisure opportunities for children and adults with disabilities.
14. Recreation Management. My example: The average salary for people with degrees in recreation management is $36,000 to $40,000 for entry level positions.
15. Theme Parks. My example: My favorite theme park is Typhoon Lagoon in Orlando, Florida.
16. Transient Occupancy Tax (TOT). My example: Airbnb will begin collecting transient occupancy taxes for San Francisco bookings next month.
17. Voluntary Organizations. My example: “Fathers Heart Ministries” is considered, one of the top ten voluntary organizations in NYC.

Touring the Dark Side of Los Angeles
By Leslie Pariseau
This article will satisfy all those macabre lovers and true-crime enthusiasts with some of the secrets of the history of Los Angeles’ not so angelic city. Kim Cooper and Richard Schave, local historians, saw that there was a thirst that needed to be quenched and so they started a tour bus company called Esotouric in 2005, which takes crime fanatics into the infamous journeys of crimes of the past.
One of the many stops of the tour bus titled “Bat Man” case, dates as far back as 1922 and dives into the bizarre murder story of a housewife who hid her husband’s murdered body in the attic where her lover lived. The tour also included a visit to the oldest and most popular cold cases in their city by far; the murder of Elizabeth Short in 1947, also called “Black Dahlia” by not just telling her story but by showing her regular haunts, including where her body was found in two body parts, cut at the torso.
Another tour bus company who is also capitalizing on the arcane, The Dearly Departed does it with a sense of humor. I know, murder and laughter should not go together but it is working for them. The owner, Scott Michaels, specializes in cases such as the Mason-focused Helter-Skelter murders. For a few years they sold chunks of Sharon Tate’s fireplace as souvenirs until the supply ran out. The city has enough crime cases to keep everyone tour buses in business for years to come. Their stories will never run out of supply as long as people curiosities need to be feed. It is peeking my curiosity.

Chapter Summary

Through chapter 5 we learn a lot about beverages.  It breaks them down into alcoholic and non alcoholic beverages. It discusses the history and making of different types of wine, including sparkling wine, and fortified wine. It teaches how to read wine labels and talks about healthy  drinking habits. The chapter also explains the brewing process of beer and identifies various types of beers. Then it moves on to liquor, listing some of the most popular whiskies such as Canadian, and Irish.  In the section of the nonalcoholic beverages it talks about coffee, tea, carbonated drinks,  energy drinks, and bottled water. It discusses inventory control, bar set up, and liquor liability with the law. The chapter also suggested the pairing of wine and food.

Key Words and Concepts

1. Alcoholic Beverage. My example: Maria can’t serve alcoholic beverages in her new restaurant until she receives the license to do so.
2. Beer. My example: John blames his weight gain to beer consumption.
3. Brandy. My example: They drank more brandy than us at the party.
4. Champagne. My example: David poured champagne and made a toast.
5. Cognac. My example: A French brandy distilled from wine in the area of Cognac, France.
6. Dram Shop Legislation. My example: Laws and procedures that govern the legal operation of establishments that sell measured alcoholic beverages.
7. Fermentation. My example: The process of fermentation turns the grapes into wine.
8. Fining. My example: A fining agent was added to the wine to reduce its bitter flavor.
9. Fortified Wines. My example: The original reason for fortifying wines was to preserve them.
10. Hops. My example: Hops are one of the basic ingredients in beer brewing.
11. Inventory Control. My example: Management needs to use effective inventory control to ensure profit results.
12. Liquor. My example: I drink wine, but not hard liquor like whiskey or vodka.
13. Malt. My example: Usually barley, that has been allowed to sprout, used chiefly in brewing and distilling.
14. Mashing My example: The mashing process will directly determine the concentration of unfermented sugars in the beer.
15. Must. My example: A mixture of grape pulp, skins, seeds, and stems.
16. Nonalcoholic Beverage. My example: We have a vodka punch for the adults as well as a nonalcoholic punch for the kids.
17. Prohibition. My example: The prevention by law of the manufacture and sale of alcohol, especially in the US between 1920 and 1933.
18. Proof. My example: Is equal to twice the percentage of alcohol in the beverage.
19. Sparkling Wine. My example: Champagne is my favorite sparkling wine.
20. Spirit. My example: A spirit is an alcoholic beverage that is distinguished by the distillation process.
21. Vintage. My example: This year’s vintage is expected to be of higher than average quality, due to the excellent weather.
22. White Spirits. My example: Some of the white spirits served at the annual gala were gin, rum, vodka, and tequila.
23. Wine. My example: We bought a case of wine for the party at the winery.
24. Wine and Food Pairing. My example: The sommelier was present at the restaurant making food pairing recommendations for the guests.
25. Wine Tasting. My example: They like to attend a wine tasting event every year.
26. Wort. My example: Is the liquid extracted from the mashing process during the brewing of beer or whisky.
27. Yeast. My example: The yeast is responsible for the converting of sugar to alcohol and carbon dioxide in the fermentation stage, and is also the final component that determines the flavor of the beer. 

Want to Visit South Africa? How to Survive a Long Flight

By Justin Sablich

This article was very interesting to read; it is about how to get as much enjoyment out of a long, direct flight. I myself have not travel on an extended flight such as one to Africa but I found the tips very useful for not only a long flight but short one also.  Mr. Sablich went to Africa, which took 16 hours, to visit the family of his now wife. After 16 hours, you’ll either like traveling or hate it; he stated.

For traveling such a lengthy aeronautical trip, he supplies us with some helpful surviving skills and suggestions. Most people would pay for an upgrade to First Class for comfortability but it isn’t necessary for prolonged trips because most are equipped with slightly more legroom and added goodies;  paying extra if can’t afford it, may be a waste.  According to Patrick Smith, a pilot who is also the author of “Cockpit Confidential: Everything You Need to Know About Air Travel.” Seatguru.com helps you discover comfortable seating.

Most airlines don’t give you freebies until asked. It is their version of “Don’t Ask, Won’t Give.”   Routehappy.com is very helpful for finding out about your flights amenities. The goodies, also known as amenities will help you but not as much.  As an educated consumer, packing your goodies in your carry-on bag; it’s essential.  It should include, but not exclusive to, bringing in water, sweater or hoodie and some of your favorite snacks.  Flight Attendant Kara Mulder, who has a blog, suggest to bring in food you can tolerate because “your body will response differently to food when at altitude.  Something I never knew.  Granola bars and dry oatmeal is highly recommended.

This article is inspiring me to travel, not 16 hours but if I know what to pack and how to entertain myself, it would be worth it. I am now aware of two useful websites.  To save money  as long as you plan ahead the trip should make you feel at ease, free from anxiety.  The article was very informative and it should serve as an insightful guide before travel, either short or long journeys.

Chapter Summary

Chapter four focuses on food and beverage operations. Describes the duties and responsibilities of a food and beverage director and other key department heads. Some of the departments explained within the food and beverage division in this chapter are: Kitchen, restaurant, bars, stewarding, catering, and room service. It teaches how to do calculations using key food and beverage operating scales.

Key Words and Concepts

1. Banquet. My example: As a holiday tradition, the general manager arranged a Christmas banquet for the entire staff as a form of appreciation for their hard work.
2. Banquet Event Order (BEO). My example: The hotel catering manager prepared a banquet event order for the event manager who was organizing a fundraising gala in the main ballroom.
3.  Brigade. My example: The Brigade helps facilitate communication between staff and members. This is an organized system with the kitchen chef is in charge of supervising the rest of the line cooks.
4.  Capture Rate. My example: Capture Rate gives the general manager a predictable number on how many guests is to be expected.
5.  Catering. My example: The hotel was preparing a catering fundraiser gala for children with lupus.
6.  Catering Coordinator. My example: The catering coordinator showed the president of the fundraiser a list of foods and desserts he can choose for the fundraising gala.
7.  Catering Event Order (CEO). My example: The catering event order hired additional photographers and videographers for the gala. To insure the guest traveled home safely she hired additional transportation.
8. Catering Service Manager (CSM). My example: Overall the president of the fundraising was pleased with the hard work of the all the individuals which made the gala an absolute success. He gave a special thanks to the catering service manager for hiring such talented individuals.
9. Chef Tournant. My example: The chef tournant rotation through the stations was a major help to the station chef.
10. Chief Steward. My example: The chief steward had to call a meeting with the kitchen staff to discuss complaints being received about the waiting time for guests to receive their orders.
11. Classroom-Style Seating. My example: Classroom-style seating is optimal for the host, because it directs all the attention towards him/her.
12. Contribution Margin. My example: The general manager used the restaurant’s high contribution margin as proof to show that business was improving.
13. Dinner-Style Room Seating. My example: The chef used dinner-style room seating for his event, to ensure that everyone in attendance was being social.
14. Director Of Catering (DOC). My example: The Marriot Hotel manager searched desperately for a new director of catering. Only a good DOC knows how to prepare for an event ahead of time, so he/she is not scrambling last minute.
15. Director of Food and Beverage. My Example: As director of food and beverage, Helen always makes sure she designs a new menu for the holiday season.
16. Executive Chef. My Example: Being the new executive chef, John felt a lot of pressure on him to make sure everyone in the kitchen was performing.
17. Food Cost Percentage. My Example: Ben purchases water bottles for the hotel at $1.00 each, and then sells them for $2.00. This means his food cost percentage is 50%.
18. Food Sales Percentage. My example: The percentage of revenue generated through sale of food or drinks
19. Horseshoe-Style Room Seating. My Example: The customer service trainer requested a horseshoe-styled room seating to help the staff interact during the workshop.
20. Kitchen Manager. My Example: The kitchen manager at Sea Shore, makes sure all kitchen staff take safety procedures seriously to prevent any injuries.
21. Labor Cost Percentage. My Example: The Labor Cost Percentage for the new restaurant is 42%. This was calculated by dividing the employee labor cost ($15,000.00), by the total cost of doing business which is $35,000.00.
22. Perpetual Inventory. My Example: All modern kitchen managers use perpetual inventory software to know the exact amount of stock available.
23. Pilferage. My Example: Safes were introduced into the hotel industry to help prevent accusations of pilferage towards the room service staff.
24. Pour/Cost Percentage. My Example: Similar to food cost percentage, except used in beverage control.
25. Responsible Alcoholic Beverage Service. My Example: A bar’s failure to comply and uphold the standards of the responsible alcoholic beverage service can result in a lawsuit.
26. Restaurant Manager. My Example: To secure an effective establishment, sometimes restaurant managers have to make difficult decisions like firing an inefficient employee.
27. Room Service. My Example: One element that aided the success of the hotel industry was the offering of room service. Room service allows guests at a hotel to get up and get their day started, without having to worry about the upkeep of the room.
28. Shopper. My Example: People who are paid to use a bar as a regular guest would, except that they observe the operation closely.
29. Sous Chef. My Example: In stressful situations the head chef relies on the sous chef to aide in finding the solution.
30. Station Chef. My Example: To avoid chaos, the restaurant manager appointed several station chefs. These station chefs will each manage their own part of the kitchen, and share the responsibility.
31. Theater-Style Room Seating. My Example: Theater-style room seating is usually used for the gathering of larger groups or people.

This week I read an article about Crystal Cruises written by Shivani Vora. In this article, the author talks about this luxury cruise line that currently sails to all seven continents and that  recently announced an aggressive expansion plan for its 25th anniversary this year.  The cruise line Chief Executive Ms. Edie Rodriguez, gives details in an interview with the author, about the reasons behind their idea to expand and how it was motivated by their guests. She stated that about 50 percent are repeat customer and they were pushing them for more vacation options in their style.

Chief Executive Rodriguez is commissioning three new crafts to be built for Crystal’s core fleet. In this ambitious plan there will be a yacht making its first appearance this coming December with a trip around the Seychelles Islands. The yacht will have a submarine that will hold three people including the captain and that will go as deep as 1,000 feet underneath the water. For this adventure, they are going to offer 30 minutes excursions inside of it, and they are promising their customers a view of sea life in a way that they have never seen before. In 2017 they will launch a non water adventure, A Boeing 787 Dreamliner for 60 guests that will fly on 28- day itineraries to remote destinations around the world and a plane for 14 days trips.

Ms. Rodriguez also mentioned that ships are spending more nights docked in ports to give travelers more time to explore and the addition of fewer midnight buffets with more healthier options.

Chapter Summary

Chapter 3 focus on the duties and responsibilities of the executives and department heads of the room division operations. Explains the roles of the executive committee, hotel manager, front desk, housekeeping, reservations, and concierge services. This chapter talks about property management systems, and discuss yield management. Additionally, you learn how to  calculate occupancy percentages, average daily rate and potential rooms revenue.  Some of the most important key terms and concepts are described below.

Key Terms and Concepts

1.  Application Service Provider (ASP). My example: The General Manager at my new hotel will be reviewing bids from different companies, to secure a contract with an ASP provider for the long distance calls.
2.  Average Daily Rate (ADR). My example: Suppose that a hotel has 400 available rooms each day with a rack rate of $100. If all of the rooms were sold each day at this maximum rate, the maximum daily rate revenue sold would be $40,000.00.
3. Call Accounting Systems (CAS). My example: Is a software or hardware application that has the ability to capture, record and assign costs to all telephone usage within the hotel.
4. Catastrophe Plan. My example: It is a crucial plan among lodging executives for coping with floods, hurricanes, tornadoes and droughts.
5. Central Reservation Office (CRO). My example: The Central Reservations Office for Disney World Resort and Dining operates seven days a week with the following schedule: Monday thru Friday 7 a.m. to 10 p.m.; Saturday & Sunday 7 a.m. to 8 p.m.
6. Central Reservation System (CRS). My example: Is a computerized system that stores, and distributes information of a hotel, resort, or other lodging facilities making it easy for individuals to reserve rooms over the internet or telephone.
7. City Ledger. My example: The new hotel in Waters Place is currently looking for a city ledger; the main responsibilities would be to check all contracts and lines of credits; follow up on all outstanding accounts.
8. Concierge. My example: The concierge at the last hotel that I stayed in Orlando, helped me secured nice tickets to a dining experience by the bay.
9. Confirmed Reservations. My example: The Tropicana Hotel in Atlantic City, NJ; requested a valid email address to send me a confirmed reservation details page prior to my arrival.
10. Cost Centers. My example: Security, Accounting, Marketing and Sales, Engineering and Human Resources are among the best examples of cost centers in hotels, as they do not directly generate revenue.
11. Daily Report. My example: The front office manager at my new hotel requests a daily report, about the number of guests using the hotel’s valet parking services. He needs to make sure that the front office staff is properly promoting it.
12. Employee Right to Know. My example: As a responsible employer and to be in compliance with the law; I have my new staff attend a training session on the chemicals they may be exposed in the job.
13. Executive Committee. My example: Is a group of individuals within the hotel that consult with the general manager in a regular basis and are in charge of the sub-areas of the hotel. Global
14. Distribution System (GDS). My example: Every year global distribution systems allow me to purchase tickets from multiple different providers or airlines.
15. Guaranteed Reservations. My example: A guaranteed reservation for my hotel in Jamaica, was not issued to me until they secured the payment with a credit card.
16. Night Auditor. My example: As a night auditor I am responsible for performing basic front desk duties and ensuring that payments have been collected as necessary.
17. Occupational Safety and Health Administration (OSHA). My example: Is an agency of the United States Department of Labor. Its mission is to assure safe and healthful working conditions for working men and women by setting and enforcing standards and by providing training, outreach, education and assistance.
18. Productivity. My example: The productivity of the group’s effort surprised everyone, and increased dramatically since last year.
19. Property Management System (PMS). My example: They are computerized systems that facilitate the management of properties, personal property, equipment, including maintenance, legalities and personnel all through a single piece of software.
20. Revenue Management. My example: The Hilton Revenue Management’s experienced and talented teams are dedicated to helping their properties achieve superior market share and profitability.
21.  Revenue Centers. My example: Hotels may add a restaurant or banquet room as an additional revenue center for the business.
22. Revenue per Available Room. My example: A hotel calculation comparing the revenue generated by room rents to the total amount of rooms that are available for rent.
23. Room occupancy percentage (ROP). My example: The number of rooms occupied divided by rooms available.
24. Room Rates. My example: The standard room rate available for this coming week at the Ritz- Carlton New York, Central Park is $895 plus $136 for taxes and fees.
25. Room Division. My example: Room Division is responsible for the housekeeping, as well as for the front office staff in a hotel.
26. Uniformed Staff. My example: Employees who work in the uniformed service department of the hotel generally provide the most personalized guest service. Examples are bell attendants, door attendants, valet parking attendants and concierges.
27. Yield Management. My example: Peter is responsible for analyzing the yield management on all of their products at the hotel, to try and maximize revenue and profits.

Chapter Summary

Chapter two explains the many different aspects of the hotel business.  It describes hotel ownership and development. You learn about franchising, management contracts, referral associations, the economic impact of hotels, the different classifications of hotels and vacation ownership.

Additionally, it provides you with the names of some of the most prestigious and unusual hotels.  Talks about the future of tourism and it’s expansion often in combination with airlines with the goal of improving the economic conditions in developing countries.

 Key Terms and Concepts

1. Capital Intensive – My example: Years ago my father wanted to start a new business by opening a new gas station.  Because it was a  capital intensive business and required large amounts of expensive equipments and money; he couldn’t do it.

2. Fair Return on Investment – My example: My friend Lucy is a baker that works from her home, and receives good financial returns every time she sells a cake.

3. Feasibility Study – My example: If I win the Mega Millions Jackpot this week; I will hire project managers to complete studies to determine if my proposed ventures will be profitable as well as what risks I will encounter.

4. Direct Economic Impact – My example: The recent visit of Pope Francisco to New York City had a direct economic impact, based on visitors and organizers.

5. Indirect Economic Impact – My example: The Budget Manager at the Caesars Palace in Atlantic City, reports quarterly the expenses related to employment for the hotel, and the money spent by the hotel in items to service the guests.

6. Franchising – My example: I am reviewing the necessary information to franchise a White Castle Restaurant in Boston, MA.

7. Management Contracts – My example: Donald Trump has management contracts for his hotels, resorts and casinos.

8. Real Estate Investment Trust (REITs) – My example: All my classmates for HMGT 1101 pooled to buy a hotel and take advantage of the offered benefits under the reits.

9. Referral Associations – My example: In an effort to improve the overall occupancy of the hotel; the owner joins a referral association.

10. Vacation Ownership – My example: Many people that I know purchased vacation ownership, the first time they visit Orlando, FL or Cancun, Mexico.

Chef Jose Andres on Giving and Getting Back in Haiti

This week the New York Times published an article about Jose Andres, a Spanish-born chef. He is the owner of 21 restaurants around the country and in Puerto Rico and his interest for the Haiti Island lately, has caught a lot of attention. He is currently hosting a television documentary on the PBS network, in which he explores the Caribbean island of Haiti. In this documentary he also talks about his favorite dishes; especially the dijon-dijon mushroom with chicken, and the adventures that viewers can see about this place as he tries to convince the audience to consider Haiti for getaways by talking about its food and attractions such as the perfect beaches and the waterfalls in the jungles where swimming is ideal. What I found very interesting is that sometimes he likes to explore the island with friends like former President Bill Clinton.

His idea to produce this documentary came after visiting Haiti following the earthquake in 2010. According to the information recorded in an interview, he has expressed his fascinated with Haiti and his goal of changing the island’s negative image after the earthquake and help resolve in addition to its poverty issues by showing its beauty hoping others would visit it too.

Chef Jose Andres created a nonprofit organization which he named “World Central Kitchen”. This organization is intended to help Haitians feed themselves. It educates people about healthy and efficient methods of preparing food. His goal is to teach people about clean cookstoves, using solar and natural gas to preserve forest, farming and fishing industries.

Through this organization he empowered five different communities by giving them smart solutions to hunger. Furthermore, he also has a network of volunteer chefs from the U.S. who visit the communities and teach them lessons on how to cook and feed themselves.

Frankly, before reading this article, I would have never thought about visiting Haiti because the first idea that would probably come to mind is the devastating conditions after the earthquake and its poverty. But upon reading this article, not only do I want to watch his documentary on PBS but I am truly considering Haiti as one of my future travel destinations.

This chapter focuses on introducing Hospitality. We learn about its ancient history and the modern and demanding  industry that now is. It describes this fast growing business with details of the characteristics of it, trends, goals, tourism, etc… Additionally explains corporate attitude and the importance of the service in the hospitality industry.  Furthermore it suggests ways to improve services.

Key Terms and Concepts

1. Corporate Philosophy-Textbook def:  The core beliefs that drive a company’s basic organizational structure. My example: The core belief of charter schools is to provide children with the academic foundation and ambition to earn a college degree.
2. Empowerment– Textbook def:  The act of giving employees the authority, tools, and information they need to do their jobs with great autonomy.  My example: As a staff supervisor, I have been giving the empowerment to authorize overtime when needed it.
3. Front of the House– Textbook def:  Comprises all areas with which guests come in contact, including the lobby, corridors, elevators, guest rooms, restaurants and bars, meeting rooms and rest rooms. Also refers to employees who staff these areas. My example: Mr. John Doe is a consultant recently hired, to provide training to the front of the house staff at the new Marriott Hotel in Waters Place.
4. Goal- Textbook def:  A  specific result to be achieved; the end result of a plan. My example: My end goal in the Hospitality Major, is to open my own business.
5. Guest Satisfaction– Textbook def:  The desired outcome of hospitality services. My example: There are some luxury hotels, encouraging guests to comment on TripAdvisor and other review sites in an effort to access their guests satisfaction.
6. Heart of the House– Textbook def:  The back of the house. My example: Red Lobster is currently hiring to work in the heart of the house, creating outstanding dishes.
7. Hospitality– Textbook def:  1. The cordial and generous reception of guest. 2. A wide range of businesses, each of which is dedicated to the services of people away from home. My example:  Includes lodging, event planning, theme parks, transportation, cruise lines, etc…
8. Inseparability– Textbook def:  The interdependence of hospitality services offered. My example:  For a doctor to give surgical or therapeutic services, the patient should be there.
9. Intangible– Textbook def:  Something that cannot be touched. My example: My electronic version of the New York Times newspaper is an example, of an intangible asset.
10. National Restaurant Association (NRA)- Textbook def:  The association representing restaurant owners and the restaurant industry. My example: A full-time student in a 2 or 4 year restaurant/hospitality program, who is 18 years or older can join the National Restaurant Association.
11. Perishability– Textbook def:  The limited lifetime of hospitality products; for example, last night’s vacant hotel room cannot be sold today. My example: The 2015 summer season passes for Great Adventures cannot be sold after summer is over.
12. Total Quality Management (TQM)- Textbook def:  A managerial approach that integrates all of the functions and related processes of a business such that they are all aimed at maximizing guest satisfaction through ongoing improvement. My example: A customer goes to a store before the sell period is over looking for an item that is sold out, and the manager promises to bring more and gives the customer a rain check.
13. Tourism– Textbook def:  Travel for recreation or the promotion and arrangement of such travel. My example: I like to watch shows about tourism because I get ideas which places to travel next.
14. Sustainability– Textbook def:  Is the ability to achieve continuing economic prosperity while protecting the natural resources of the planet and providing a high quality of life for its people and future generations. My example: The implementation of recycling Programs.
15. Return on investment (ROA)- Textbook def:  An important financial measure that determines how well management uses business assets to produce profit; also used for planning and forecasting. It provides insight into how efficiently a company is being run by management with regards to its ability to generate profits from the assets available to the company.  My example: Most business owners hire an independent auditing firms to conduct this type of assessment.