Reference no: EM132258700

Food & Beverage Cost Control

When the P&L is produced from all the financial information for a period of time (usually a month), it gives the manager a "snapshot" of how the company did financially for that period. I would like you to name 5 items or figures that you would look at to decide how the business is doing this month or this year. Assume that you have access to last years actual results. Or, what 5 things would you look at comparing the current P&L to the foretasted numbers.

I have not selected what are the 5 best figures for you to analyses. I want you to select them and tell me why they are important to you.

IE: The difference between (if any) Net Income of the actual P&L figures and the forecasted net income. My Answer: By doing an analysis of the projections (forecasted) P&L net income and the actual net income, I will determine if I have made more, less, or the same money from what I forecasted. If the net income is higher than forecast, I would check revenue to see if I had better sales than expected. Or, were the expense lower than projected, or a combination of both. So, by asking the question about the difference between the actual net income income on the P&L and forecasted net income, I am able to analyses the P&L and determine if revenue meets, exceeds, or is less than expected. Step 2 is to explain why we had any variation from the forecast.

The managers responsibility to to be able to explain the variance in the financial report. This gives you the opportunity to create better projections in the future. Better projections may then create more efficient and profitable operations.