Financial Management Flashcards
7 cards from real CRM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Management flashcards as text
A restaurant generates $800,000 in annual revenue with $640,000 in total expenses. What is the net profit margin?
Answer: 20%
Net profit = $800,000 − $640,000 = $160,000; margin = $160,000 ÷ $800,000 = 20%.
Which costing method assigns overhead costs to menu items based on the resources each item actually consumes?
Answer: Activity-based costing
Activity-based costing (ABC) allocates overhead based on the actual activities and resources each product consumes.
A restaurant's current assets are $45,000 and current liabilities are $30,000. What is the current ratio?
Answer: 1.50
Current ratio = $45,000 ÷ $30,000 = 1.50, indicating the restaurant can cover short-term obligations.
What is the purpose of a rolling budget in restaurant financial management?
Answer: To continuously update forecasts by adding future periods as past periods close
A rolling budget is continuously updated, dropping the most recent period and adding a new future period to maintain a consistent planning horizon.
Which of the following best describes 'depreciation' in restaurant accounting?
Answer: Reduction in asset value over time allocated as an expense
Depreciation spreads the cost of long-term assets like equipment and furniture over their useful lives as a non-cash expense.
A restaurant's table turns 4 times per night with an average check of $35 and 20 tables. What is nightly revenue?
Answer: $2,800
Nightly revenue = 4 turns × $35 average check × 20 tables = $2,800.
What is 'working capital' in restaurant operations?
Answer: Current assets minus current liabilities
Working capital = current assets − current liabilities, measuring a restaurant's short-term liquidity and operational efficiency.