Financial Management Flashcards
Information from Payne-Palacia and Theis' Foodservice Management: Principles and Practices
How to calculate current ratio
current assets/current liabilities
Define liquidity
an organizations ability to pay bills
define solvency
an organizations ability to meet long-term financial obligations
how to calculate solvency ratio
total assets/total liabilities
how to calculate debt to equity raito
total liabilities/total owner’s equity
define activity
how effectively an organization uses assets
how to calculate food inventory turnover
cost of food sold/average food inventory
how to calculate average inventory
(beginning food inventory + end food inventory) / 2
define profitability
how effective management is generating sales, controlling expenses, and providing a profit
how to calculate profit margin
net profit/sales
how to calculate return on equity
net profit / equity
how to calculate return on assets
net profit / total assets
define operating
how successful is the org in generating revenue and controlling expenses
how to calculate average customer check
total sales / # guest served
how to calculate seat turnover
covers served / number of seats
how to calculate food cost percent
cost of food sold / food sales
how to calculate labor cost percent
cost of labor (including salaries, wages, and benefits) / total sales
how to calculate food cost per patient
food cost / number of patients served
how to calculate meals per labor hour
meals served / number of labor hours needed to produce the meals
how to calculate labor minutes per meal
minutes of labor needed to produce meals / number of meals served
how to calculate meals per FTE
meals served / number of FTEs to produce the meals
how to calculate selling price of a menu item using the food cost percentage method
item food cost x (100/percent income desired from food)
define item contribution margin
aka gross profit margin, about that remains after food cost of a menu item is subtracted from the selling price of that item
how to calculate selling price of a menu item using the item contribution margin
item food cost + desired item contribution margin
