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 manager notices actual food costs are consistently 5% above budget. Which action should be taken FIRST?
Answer: Conduct a variance analysis to identify the root cause
Variance analysis identifies whether the gap stems from purchasing, waste, theft, portioning, or pricing before corrective action is taken.
Which financial ratio measures how many times a restaurant sells and replaces its inventory during a period?
Answer: Inventory turnover ratio
Inventory turnover = Cost of goods sold ÷ Average inventory, measuring how efficiently inventory is managed.
What is the primary purpose of a cash flow projection in restaurant management?
Answer: To anticipate periods of cash surplus or shortfall in advance
Cash flow projections allow managers to plan ahead for lean periods and avoid running short on operating funds.
A server upsells a $6 appetizer to each table. If the restaurant serves 80 covers per night, what is the daily upsell revenue?
Answer: $480
Daily upsell revenue = $6 × 80 covers = $480.
Which expense category typically represents the largest single cost in a full-service restaurant?
Answer: Labor cost
Labor cost (including wages, benefits, and payroll taxes) typically accounts for 30–35% of revenue, often the largest single expense category.
What does ROI stand for and how is it calculated in a restaurant context?
Answer: Return On Investment; net profit ÷ total investment × 100
ROI = (Net profit ÷ Total investment) × 100, measuring the profitability of the capital invested in the restaurant.
A restaurant with $1.2M in annual sales has $180,000 in fixed costs and $840,000 in variable costs. What is the operating profit?
Answer: $180,000
Operating profit = $1,200,000 − $180,000 − $840,000 = $180,000.