1. With reference to the financial statements prepared for the 4C Company for

Year 2004 (see Case 2), prepare a common-size statement. The local restaurant association provided Charlie with statistical data that are applicable for a table service, family-oriented, lunch and dinner restaurant similar to his (see next page). The data provide percentage ranges for typical elements of an income statement. Comment on how the operating income (income before tax) of the 4C restaurant compares to similar restaurants. Is this a valid comparison? Explain.

2. The guest count (covers) for the 4C restaurant for the year was 66,612. Determine the overall average check (revenue) for food and beverages. In your opinion, does the average check for food and beverages appear reasonable for a budget-conscious, family-type table service restaurant?

3. Calculate the cost percentages for food cost, beverage cost, and the total cost of sales as a percentage of sales revenue. How does cost of sales for food, beverages, and the total cost of sales compare to the ranges provided for a restaurant of this type?

4. Given the choice, would it be better to have a higher or lower percentage of beverage sales revenue compared to food sales revenue?