Analyzing an Income

1
Analyzing an Income Cash Flow Statement
Oguz Benice Bilkent UniversitySchool of Tourism
Hotel Management
2
Definition
ANALYZING AN INCOME CASH FLOW STATEMENT

• To control cost, managers need to be able to
  calculate the net profit, or loss. The Income
  cash flow statement is the financial document
  showing a company's income, expenses and cash
  balance over a given period . ?

3
Food Sales

• Include revenue from food, coffee, tea, milk,
  juices and other non-alcoholic items typically
  part of a meal. If there is no alcoholic beverage
  service, soft drinks would also be included in
  this category. ?

4
Beverage Sales

• Beverage Sales includes wine, liquor, beer and
  soft drinks. ?

5
Food Cost

• Food Cost includes food, coffee, tea, milk and
  soft drink expenses associated with the service
  of meals. (generally between 25 35 of food
  sales). ?

6
Beverage Cost

• Beverage Cost includes beverage expenditures
  associated with the sale of all wines, liquors
  and beers. (generally between 15 25 of
  beverage sales). ?

7
Other Income

• Other Income includes cover charges, banquet room
  rental, sundry sales, vending sales, telephone
  commissions, salvage sales and other
  miscellaneous revenue items. ?

8
Employee Wages

• Employee wages includes all positions including
  categories such as, host, server bus person,
  cook, dishwasher, storeroom clerk and bartenders
  wages except restaurant managers. ?

9
Management Salaries

• Management salaries includes restaurant manager
  salary. ?

10
Employee Benefits

• Employee Benefits include social security taxes,
  unemployment taxes and state health insurance
  tax. It also includes insurance (such as
  worker's compensation and health coverage),
  employee meals and other benefits. ?

11
Direct Operating Exp.

• Direct Operating Expense includes uniforms,
  laundry, tableware and linen, utensils, kitchen
  fuel, supplies, menus, contract cleaning, flowers
  and decorations, auto expense, licenses and
  permits and other expenses. ?

12
Music Entertainment

• Music and Entertainment Expense includes
  musicians, entertainers, royalties and other
  costs.
• In a dining situation, the entertainment should
  complement the overall atmosphere. In some type
  of facilities, the entertainment may be a major
  reason why people come in.
• The cost of entertainment must produce a revenue
  increase greater than the cost. (see graph) ?

13
Marketing

• Marketing Expense includes selling and promotion
  costs, advertising, public relations, franchise
  fees and other expenses incurred to make the
  public aware of the restaurant. (should be around
  3 from total FB sales, and 6 for the first
  year). ?

14
Utilities

• Utilities Expense includes electricity, gas,
  water and sewer services. It excludes fuel used
  to operate the kitchen. ?

15
Repairs Maintenance

• Repairs and Maintenance Expense includes
  supplies, materials and contracted work
  associated with maintaining the building and
  grounds. ?

16
Administrative

• Administrative Expense includes overhead items
  required to run the business, but not directly
  related to the service of the customer. Items
  included are office supplies, postage, computers
  and software, telephone, travel, general
  insurance, credit card commissions, collection
  fees, cash shortages, and other administrative
  costs. ?

17
Rent

• Rent is the amount paid for the use of a
  premises. (should not exceed 5 to 8 of total
  FB sales). ?

18
Interest

• Interest Expense is the periodic charge for the
  use of funds loaned by a bank or other lender. ?

19
KDV

• KDV is the Turkish Tax based on total food
  beverage sales plus other income. ?

20
Refund

• Refund is the periodic back payment of funds
  loaned by a bank or other lender. ?

21
Exercise A1
22
Exercise A1 ( result)
23
Exercise A1 ( result)
24
Exercise A2
25
Exercise A2 ( result)
26
Exercise A2 ( result)
27
Break-even Point
ANALYZING AN INCOME CASH FLOW STATEMENT

• To control cost, managers need to be able to
  calculate the breakeven point. The simple
  definition of a breakeven point is the volume of
  sales or guest needed daily for a business to
  generate zero profit. Formula

28
Exercise A1 ( result)
29
Break-even Point
ANALYZING AN INCOME CASH FLOW STATEMENT

• Calculate the breakeven for the exercice A2

30
Exercise A2 ( result)
31
Exercise A3
32
Exercise A4
33
Forecasting Yearly Sales
ANALYZING AN INCOME CASH FLOW STATEMENT
34
Forecasting Monthly Sales
ANALYZING AN INCOME CASH FLOW STATEMENT
35
Exercise D1
ANALYZING AN INCOME CASH FLOW STATEMENT
36
Exercise D1 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
37
Exercise E1
ANALYZING AN INCOME CASH FLOW STATEMENT
38
Exercise E1 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
39
Exercise D2
ANALYZING AN INCOME CASH FLOW STATEMENT
40
Exercise D2 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
41
Exercise E2
ANALYZING AN INCOME CASH FLOW STATEMENT
42
Exercise E2 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
43
Exercise F2
ANALYZING AN INCOME CASH FLOW STATEMENT
44
Exercise F2 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
45
Exercise F2 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
46
Exercise F2 (result)
ANALYZING AN INCOME CASH FLOW STATEMENT
47
Exercise E1
ANALYZING AN INCOME CASH FLOW STATEMENT

• The cost of entertainment must produce a revenue
  increase greater than the cost. Consider the
  following sample

48
Mid Term 2005 Spring - A
ANALYZING AN INCOME CASH FLOW STATEMENT
49
Mid Term 2005 Spring - B
ANALYZING AN INCOME CASH FLOW STATEMENT
50
Mid Term 2005 Spring - C
ANALYZING AN INCOME CASH FLOW STATEMENT
51
Mid Term 2005 Spring - D
ANALYZING AN INCOME CASH FLOW STATEMENT
52
Mid Term 2005 Spring A
53
Mid Term 2005 Spring B
54
Mid Term 2005 Spring C
55
Mid Term 2005 Spring D