Question

Your first quarter has come to a close and you know it’s important to monitor your restaurant’s performance. Share with your classmates what information the balance sheet and income statement will provide you, and how you can use that information to make decisions and better manage your restaurant.

Answer 1

Answer)

The information that balance sheet and income statement provide are:

1)The balance sheet shows what the restaurant owns,what the restaurant owes,the type of investments made which in turn represents the current financial situation of the restaurant.

2)The income statements provide information about how the restaurant gain revenue and expenditure incurs through which the Net profit or loss that the owners of the restaurant earned.

Uses of the information provided by balance sheet and income statement in decisions and better management:

1)Finding the areas where the costs are incurred more than estimated and reducing them.

2)Purchase of new capital assets that can improve efficiency of the business.

3)Best source of finance if any additional finance requirement is expected.

4) Continue or discontinue certain items or services.

5)Human resources management i.e any new employees are needed for more serving or appointment of chef for any particular foods like Chinese etc demanded by the people.