HNF 444 EXAM 1 QUESTIONS WITH VERIFIED ANSWERS
What is the importance of financial information and statements? - Answers - - effective
management of financial resources is critical to the success of any foodservice (or
other) operation
- use accounting and financial management concepts to analyze financial performance
Who cares about financial performance? - Answers - - owners
- board of directors
- employees
- managers
- creditors
- governmental agencies
- financial analysis
Why would a clinical dietitian care about financial performance? - Answers - This can
affect their salary and the quality of care that they can give to patients, especially in the
hospital setting.
Describe a balance sheet, including assets, liabilities, and owner's equity - Answers - -
balance sheet: a sheet that goes into depth over the income and expenditure of an
operation
- assets: any intangible or tangible item that produces positive value for a company
- liabilities: what a business owes
- owner's equity:the portion of a company's assets that an owner can claim
Describe an income statement (profit and loss statement) including revenues/income
and expenses/costs (food, beverage, labor, overhead) - Answers - - income statement:
a primary managerial tool reporting the revenues, expenses, and profit or loss as a
result of operations for a period of time
- revenues/income: the cash receipts or funds allocated to the operation for the period
- expenses/cost: the costs of products sold that generated the revenue. This includes
food, beverage, labor, and overhead.
What are ratio analysis?
- are increased sales always a good thing?
- calculate operating ratios - Answers - Ratio analysis are useful for comparing present
performance to a previous time period, to another company's performance, to industry
average, and/or budgeted figures.
- increased sales are not always a good thing because this can increase food cost and
labor cost are you are selling more product.
- usually, ratio of the dollar amount of a line item to TOTAL SALES besides food and
beverage costs
, What is a benchmark? - Answers - A standard that something will be compared to for
assessment
Define and calculate: food cost and food cost percent - Answers - divide the food cost
by the total food sales x 100
Define and calculate: beverage cost and beverage cost percent - Answers - divide the
beverage cost by the total beverage sales x 100
Define and calculate: food and beverage cost% - Answers - food and beverage cost
divided by total sales x 100 = food and beverage cost %
Define and calculate: food and beverage cost benchmarks - Answers - Prime cost
benchmark for the food and beverage industry is 60% or less of food and beverage
revenue
Define and calculate: sales or income - Answers - sales of food, sales of beverages,
total sales
Define and calculate: labor costs and labor cost percent - Answers - labor cost divided
by total sales x 100
Define and calculate: prime cost - Answers - Prime cost is the cost of labor and material
to make a product.
- (combined total cost of food and beverage + labor costs) then divided by total sales to
get prime cost %
Define and calculate: gross profit - Answers - income - the cost of sales
Define and calculate: net profit - Answers - income - all costs
Define and calculate: overhead - Answers - all costs on the income statement except for
labor and material (food and beverage costs)
- things like rent, utilities, taxes, etc.
What is the difference between a fiscal or calendar year? - Answers - a calendar year
starts on Jan. 1 and ends on dec. 31, however, a fiscal year can start whenever and
end 365 days later.
Why would you expect a fast food, family style, or fine dining restaurant to have more
profit and why? - Answers - A fast food restaurant would have the most profit due to a
low overhead (low labor costs and high food costs for customers vs what they pay for
the inventory)
Define and describe the following cost terminology: fixed - Answers - Do not vary with
sales or activity
What is the importance of financial information and statements? - Answers - - effective
management of financial resources is critical to the success of any foodservice (or
other) operation
- use accounting and financial management concepts to analyze financial performance
Who cares about financial performance? - Answers - - owners
- board of directors
- employees
- managers
- creditors
- governmental agencies
- financial analysis
Why would a clinical dietitian care about financial performance? - Answers - This can
affect their salary and the quality of care that they can give to patients, especially in the
hospital setting.
Describe a balance sheet, including assets, liabilities, and owner's equity - Answers - -
balance sheet: a sheet that goes into depth over the income and expenditure of an
operation
- assets: any intangible or tangible item that produces positive value for a company
- liabilities: what a business owes
- owner's equity:the portion of a company's assets that an owner can claim
Describe an income statement (profit and loss statement) including revenues/income
and expenses/costs (food, beverage, labor, overhead) - Answers - - income statement:
a primary managerial tool reporting the revenues, expenses, and profit or loss as a
result of operations for a period of time
- revenues/income: the cash receipts or funds allocated to the operation for the period
- expenses/cost: the costs of products sold that generated the revenue. This includes
food, beverage, labor, and overhead.
What are ratio analysis?
- are increased sales always a good thing?
- calculate operating ratios - Answers - Ratio analysis are useful for comparing present
performance to a previous time period, to another company's performance, to industry
average, and/or budgeted figures.
- increased sales are not always a good thing because this can increase food cost and
labor cost are you are selling more product.
- usually, ratio of the dollar amount of a line item to TOTAL SALES besides food and
beverage costs
, What is a benchmark? - Answers - A standard that something will be compared to for
assessment
Define and calculate: food cost and food cost percent - Answers - divide the food cost
by the total food sales x 100
Define and calculate: beverage cost and beverage cost percent - Answers - divide the
beverage cost by the total beverage sales x 100
Define and calculate: food and beverage cost% - Answers - food and beverage cost
divided by total sales x 100 = food and beverage cost %
Define and calculate: food and beverage cost benchmarks - Answers - Prime cost
benchmark for the food and beverage industry is 60% or less of food and beverage
revenue
Define and calculate: sales or income - Answers - sales of food, sales of beverages,
total sales
Define and calculate: labor costs and labor cost percent - Answers - labor cost divided
by total sales x 100
Define and calculate: prime cost - Answers - Prime cost is the cost of labor and material
to make a product.
- (combined total cost of food and beverage + labor costs) then divided by total sales to
get prime cost %
Define and calculate: gross profit - Answers - income - the cost of sales
Define and calculate: net profit - Answers - income - all costs
Define and calculate: overhead - Answers - all costs on the income statement except for
labor and material (food and beverage costs)
- things like rent, utilities, taxes, etc.
What is the difference between a fiscal or calendar year? - Answers - a calendar year
starts on Jan. 1 and ends on dec. 31, however, a fiscal year can start whenever and
end 365 days later.
Why would you expect a fast food, family style, or fine dining restaurant to have more
profit and why? - Answers - A fast food restaurant would have the most profit due to a
low overhead (low labor costs and high food costs for customers vs what they pay for
the inventory)
Define and describe the following cost terminology: fixed - Answers - Do not vary with
sales or activity
