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The casino business operates differently from the traditional manufacturing and selling business where they can easily keep track of their expenses and income.
Casinos on the other hand operate in a more complex manner where money is converted in the form of chips.
This complicates how many chips were actually redeemed and how many were kept by casino players as souvenirs. Furthermore, slots and table transactions are carried out without any written recording which makes accounting of the financial transactions taking place in these areas more complicated and difficult to the casino's accounting department.
Because a meticulous recording of financial transactions are hindered by the fast paced casino activities in addition to the less tangible forms of money passed around from casino games which are usually converted into chips, the accounting are in greater demand of pressure in managing the casino's financial transactions.
Managers in this area of casino operation ardently devise plans than will help them cope with the fast flow of financial transactions taking place in the casino and implement procedures effective to control its expenses and to gain more profits.
Because casino's operation involves money, an effective accounting procedure will help provide managers an overview of the financial condition of the casino to which they rely from such information to arrive to a wise decision concerning the appropriate management of the casino's finances.
It is the responsibility of the accounting personnel specifically the finance manager to analyze the profits of the casino and the cost of its operation.
Remain cognizant that the drop is simply an exchange of currency for playing chips, and understand that the casino has a future cash liability to redeem outstanding chips still within their customers' possession.
The drop total is a good metric to gauge overall casino customer traffic. Keep an ongoing calculation of the casino's "handle".
The handle is the total amount of wagers made by the casino's customers. Retain statistics showing how the handle is allocated between the various gaming activities offered by the casino.
Data that breaks out the handle derived from slot machines versus table games such as blackjack can prove valuable when making strategic casino management decisions.
Logically, the handle should at least equal the drop as the casino's customers purchased chips or tokens with the intent of gambling as opposed to immediately redeeming them back for cash.
Calculate the casino's win or loss from gaming on a daily basis. Use the calculation of the drop minus the total of chips and tokens cashed back in by customers as a check on the accuracy of the win or loss figure.
Keep in mind that outstanding playing chips still in the possession of the casino's players represent a cash liability on behalf of the casino. Add the casino's gaming win or loss together with other revenue sources such as from drinks, food and parking fees in order to calculate total revenue.
Tally the total operating expenses of the casino, including all applicable categories such as payroll, utilities, security and advertising expense.
Subtract this expense number from the total revenue calculation in order to derive the casino's EBITDA earnings before interest, taxes, depreciation and amortization.
Subtract from this EBITDA number any applicable interest paid on loans, federal and state taxes paid, depreciation of assets or amortization of purchases in order to yield the casino's net profit figure.