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Financial Management Flashcards

7 cards from real CRM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Financial Management flashcards as text

  1. A restaurant's prime cost ratio is 68%. If total sales are $50,000, what is the prime cost?

    Answer: $34,000

    Prime cost = 68% × $50,000 = $34,000.

  2. Which financial document shows a restaurant's revenue, costs, and profit over a specific time period?

    Answer: Profit and loss statement

    The profit and loss (P&L) statement summarizes revenues and expenses over a defined period.

  3. What does a restaurant's 'contribution margin' represent?

    Answer: Revenue minus variable costs

    Contribution margin equals revenue minus variable costs, showing how much covers fixed costs and profit.

  4. A restaurant has fixed costs of $20,000/month and a contribution margin ratio of 40%. What is the break-even sales volume?

    Answer: $50,000

    Break-even = Fixed costs ÷ Contribution margin ratio = $20,000 ÷ 0.40 = $50,000.

  5. Which metric measures how efficiently a restaurant converts revenue into actual cash?

    Answer: Operating cash flow

    Operating cash flow measures actual cash generated from restaurant operations, separate from accounting profit.

  6. If a menu item costs $4.50 to produce and is sold for $16.00, what is its food cost percentage?

    Answer: 28.1%

    Food cost % = ($4.50 ÷ $16.00) × 100 = 28.1%.

  7. What is 'accounts payable' in a restaurant context?

    Answer: Money the restaurant owes to suppliers and vendors

    Accounts payable represents money the restaurant owes to suppliers, vendors, and creditors for goods or services received.