RESTAURANT COST CONTROL - CHAPTER 8

How does effective financial forecasting impact a foodservice operation?

Why is cash flow management important for a foodservice operation?

• It is irrelevant to the day-to-day operations

• It helps ensure that the operation has enough cash to meet its obligations

• It is only necessary for large corporations

• It should be left to external accountants to manage

How can variance analysis benefit foodservice financial management?

• By complicating the financial review process

• By identifying differences between planned and actual financial performance

• By ensuring that all variances are eliminated

• By reducing the need for a budget

What is a budget in the context of foodservice financial management?

• A detailed plan for spending on entertainment only

• A financial document that projects future income and expenditures

• A historical record of past expenses

• A suggestion that is rarely followed

How should financial risks be managed in foodservice?

• By avoiding all forms of investment

• Through careful analysis and strategic planning

• By focusing on short-term gains only

• By outsourcing all financial decisions

What role does a balance sheet play in financial management?

• It balances the interests of customers and staff

• It shows the assets, liabilities, and equity at a specific point in time

• It is only used during tax season

• It records daily sales activities

Why is it important for foodservice managers to understand financial statements?

• To impress investors with jargon

• To make informed decisions about operational and financial strategies

• It is not necessary; this is the job of accountants

• To fill out paperwork

What does a profit and loss statement provide information about?

• Employee performance only

• Customer satisfaction levels

• The financial results of operations over a specific period

• The physical layout of the business

Why is managing credit in foodservice operations important?

• It is only relevant for customers, not for operations

• Proper credit management helps maintain cash flow and supplier relationships

• To increase the reliance on loans

• Managing credit has no impact on operations

How can depreciation be used as a financial tool in foodservice?

• It is used to decrease taxes through deductions on asset wear and tear

• It increases the value of assets over time

• It is a method of increasing cash on hand immediately

• It is only applicable to food and beverage costs