Case Study: The Sunset Beach Grill The Sunset Beach Grill is a full-service restaurant located in downtown Victoria. The operation serves a very contemporary menu featuring an array of foods sourced locally to a diverse crowd that has consistently praised the establishment for its food, beverages, service and overall atmosphere. Phillip Jackson has recently been appointed as the General Manager and is getting ready to complete the month-end financials for the month of December. Using the information included below, please assist Phillip completing the operations income statement as well as several other ratio calculations. Sunset Beach Grill F&B Financial Information General: The data is for the month of December 31 days The Sunset Beach Grill is a full-service restaurant with 70 seats Hours of operation are from 4:30PM to 10:00PM The restaurant served 5,890 guests this period Sales: The point of sales (POS) captured the following sales data during the period: Appetizers $73,000 Main Courses $60,000 Desserts $25,895 Take-Out $16,985 Coffee/Tea $3,255 Soft Drinks $2,640 Beer $7,265 Wine $27,568 Liquor $7,500 Merchandise $1,000 Other Income: The operation received $500 from the sale of food scraps to a local pig farmer. Inventory: The following data is based on inventory management reports: Beginning Food Inventory $6,489 Ending Food Inventory $4,989 Beginning Beverage Inventory $4,568 Ending Beverage Inventory $5,689 Beginning Merchandise Inventory $10,000 Ending Merchandise Inventory $9,500 Purchases: The following purchases were made during the period: Food Purchases $65,013 Beverage Purchases $16,598 Merchandise Purchases $0 Payroll Data: The following reflects the information collected by the payroll system for the period. NOTE: Benefits are calculated as 10% of wages. Role # Employees Wage Total Monthly Hours Dishwasher 5 $7.95/hour 650 Line Cook 6 $15.50/hour 1000 Chef 1 $30.00/hour 220 Sous-Chef 2 $22.50/hour 400 Waitpersons 9 $5.95/hour 800 Hostess 3 $11.95/hour 335 Office Clerk 1 $12.95/hour 152 Manager 1 1 $5,085/month Na Manager 2 1 $4,425/month Na Asst. Manager 1 $2,847/month Na Administrative and General Expenses: The following are administrative and general expenses: Office Supplies $356 Magazine Subscriptions $110 Cash Shortages $125 Insurance (Liability) $2,572 Data Processing $225 Rental Fees $225 Licenses $125 Professional Fees $650 Repairs and Maintenance: The following are costs related to repairs and maintenance: Refrigerator Repairs $675 Repair Mirror in Bathroom $550 Janitorial Services $925 Carpenter to repair crown molding damage $275 Depreciation and Interest: FF&E Depreciation $1,158 Interest Expense $4,195 Other Costs: The following represents other costs incurred: Employee Meals ($3.00/meal x 600 Meals) $1,800 Complimentary Meals $500 Jazz Ensemble $6,000 ASCAP and BMI payments (for music) $150 Newspaper Advertising $1,650 Sponsorship of Little League Team $1,000 Direct Mail campaign $750 China and Glassware $895 Cleaning Supplies $1,895 Paper Supplies $1,952 Flowers $1,500 Linen Rentals $1,650 Waste Removal $125 Uniform Laundry $1,250 Kitchen Fuel $915 Electricity $3,985 Heating Oil $275 Rent $8,500 Fire Insurance for Property $400

Part 1: Create an Income Statement 1. Use the information included above to complete the income statement fields. Input your figures in the grid/template included below. Income Statement Sales $ % Food Beverage Merchandise & Other Total Sales Cost of Sales Food Beverage Merchandise & Other Total Cost of Sales Gross Profit Food Beverage Merchandise & Other Total Gross Profit Labor Management Staff Employee Benefits Total Labor Prime Cost Other Controllable Expenses Direct Operating Music & Entertainment Marketing Utilities Admin. & General Repairs & Maintenance Total Other Controllable Expenses Controllable Income (Managers Operating Income) Non-Controllable Expenses Occupancy Costs Equipment Leases Depreciation & Amortization Total Non-Controllable Expenses Operating Income Corporate Overhead Interest Expense Other (Income) /Expense Total Income Before Taxes Part 2: Calculating Financial Ratios Supplementary Financial Information From Balance Sheet Current Assets $954,678 Current Liabilities $632,915 Total Assets $2,876,521 Total Liabilities $995,376 2. Use the information included above (both sections) to calculate the financial ratios included below. Input your figures in the grid/template provided. Financial Ratios Food Cost Percentage Beverage Cost Percentage Labor Cost Percentage Average Food Service Check Seat Turnover Profit Margin Average Food Inventory Food Inventory Turnover Solvency Ratio Current Ratio

Income Statement - Line Descriptions Food Sales all food sales as well as non-alcoholic beverages Beverage Sales all alcoholic beverage sales Merchandise all merchandise sales Food Cost costs of food and non-alcoholic beverages Beverage Cost costs of alcoholic beverages Merchandise costs of non-food or beverage items Gross Profit sales minus cost of sales Payroll Mgmt. all wages paid to mgmt. staff Payroll Staff all wages paid to hourly staff Employee Benefits includes the costs of all benefits provided to employees Prime Cost total cost of sales and labor Direct Operating Expenses costs associated with providing services to customers Music & Entertainment costs associated with music and entertainment Marketing costs associated with market research, communications and promotions Utilities all utility costs Admin & General costs of items needed to run the operation and not connected to guest service Repairs & Maintenance costs associated with all repairs and maintenance of building & equipment Controllable Income total sales minus controllable expenses Occupancy Costs rent, property taxes & property insurance Equipment Leases costs of leasing equipment or furniture Depreciation & Amortization includes costs of depreciation and amortization of assets Operating Income total income prior to overhead, interests, etc. total sales minus the sum of controllable and uncontrollable expenses Corporate Overhead applicable to multi-unit operations Interest Expense cost of borrowing money Other (Income)/Expense cost (or income) generated from activities outside scope of operations Income Before Taxes operating income minus corporate overhead plus interest expense plus other (income) or expense