Answered step by step
Verified Expert Solution
Question
1 Approved Answer
a. With reference to the financial statements prepared for the 4C Company for Year 2007 (see Case 2), prepare a common-size vertical statement. The local
a. With reference to the financial statements prepared for the 4C Company for Year 2007 (see Case 2), prepare a common-size vertical statement. The local restaurant association provided Charlie with statistical data that are applica- 34 CHAPTER 3 ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS ble for a table service, family-oriented, lunch and dinner restaurant similar to his (see below). The data provide percentage ranges for typical elements of an income statement. Comment on how the operating income (before tax) of the 4C restaurant compares to similar restaurants. Is the comparison valid? Explain. b. The guest count (covers) for the 4C restaurant for the year was 66,612 . Determine the overall average check (sales 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? c. Calculate the cost percentages for food cost, beverage cost, and the total cost of sales as a percentage of total 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? d. Given the choice, would it be better to have a higher or lower percentage of beverage sales revenue compared to food sales revenue? a. With reference to the financial statements prepared for the 4C Company for Year 2007 (see Case 2), prepare a common-size vertical statement. The local restaurant association provided Charlie with statistical data that are applica- 34 CHAPTER 3 ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS ble for a table service, family-oriented, lunch and dinner restaurant similar to his (see below). The data provide percentage ranges for typical elements of an income statement. Comment on how the operating income (before tax) of the 4C restaurant compares to similar restaurants. Is the comparison valid? Explain. b. The guest count (covers) for the 4C restaurant for the year was 66,612 . Determine the overall average check (sales 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? c. Calculate the cost percentages for food cost, beverage cost, and the total cost of sales as a percentage of total 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? d. Given the choice, would it be better to have a higher or lower percentage of beverage sales revenue compared to food sales revenue
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started