To find the RevPAR of a hotel, multiply the average occupancy rate during a given time period time by the average daily room rate. RevPAR stands for revenue per available room, and is a financial measure that hotels use to evaluate their performance in a given time period.
As an example, find the RevPAR for a hotel with 100 rooms during the month of January, which has 31 days.
To calculate the average room occupancy in January, divide the number of occupied rooms by the number of available rooms during the time period. In the example, there are 100 rooms available on each day in January, so in total, there are 3100 rooms available for the whole month (100 rooms times 31 days). If a look through hotel records reveals that 2,200 rooms were occupied in January, then the average room occupancy is 2,200 occupied rooms divided by 3,100 available rooms, which equals 0.71.
To calculate the average room rate, add up all the room rates and divide the sum by the total number of rooms in the hotel. In this example, there are 20 executive rooms in the hotel that cost $100 per night, and 80 regular rooms that cost $75 per night. The sum of all the room rates is 20 executive rooms times $100 plus 80 regular rooms times $75, which equals $8,000. Thus, the average room rate is the sum ($8,000) divided by the total number of rooms (100). $8,000 divided by 100 gives an average rate of $80 per room.
To find the final RevPAR, multiply the average occupancy rate during the chosen time period by the average room rate. In the example, RevPAR is 0.71 times $80, which is $56.80.
To calculate covariance, choose two stocks and a time frame, calculate the average price for each stock over the time frame, find the deviation of each stock, multiply the two deviations together, add the results, and divide by the total number of days. Calculating an investment covariance requires a list of historical prices, as it is a statistic that looks at historical prices to determine the relationship between two stocks or two bundles of stocks.
Full Answer >To calculate operating profit, subtract operating expenses from gross profit. Also referred to as operating income, operating profit represents the total profits, before taxes, that a business generates from its operations. This figure helps investors, potential buyers and owners determine the overall health of a company's core business practices.
Full Answer >To calculate net present value of an investment, divide the guaranteed return by 1 plus the interest rate that a different investment would bring in, and subtract the initial investment from the result. Consider a positive answer a sign that the investment is comparatively sound.
Full Answer >To calculate interest, multiply the periodic interest rate by the principle amount. For example, if you borrowed $1000 with an interest rate of 10 percent, in a year your interest paid is $100.
Full Answer >