Demystifying Restaurant Financial Statements – Part 2
By David Scott Peters
Restaurant Tip of the Week
There are three basic tools/reports you need to understand when it comes to demystifying financial statements. They are the balance sheet, the profit and loss statement (P&L) and the general ledger. All of these tools are intimately connected; one cannot exist independently of the others.
Let’s make an assumption that you take a picture of the business (a balance sheet) on the last day of each month. That picture has changed from one photo to the next. Things happened to make those pictures change; deliveries were accepted at the back door, customers came and purchased your products, people worked and were paid, and so on. A P&L is like a movie showing all of those things happening on a daily basis. Simply put, a P&L is a moving picture or movie that shows everything that went on in your restaurant between the times you took the photos.
David Scott Peters is a restaurant expert, coach, trainer and speaker, specializing in teaching independent restaurant owners how to use systems for increased sales and increased profits. He is the nationally acclaimed restaurant coach whose unique “SMART Systems” approach to boosting profits has earned him the title of, “The man who can walk into any restaurant in America and find $10,000 in undiscovered cash before he hits the back door – Guaranteed!” Visit www.TheRestaurantExpert.com for more. Learn more tips, tricks and secrets in David’s free five-part e-course, “How to Explode Your Restaurant Profits NOW!” Simply sign up to receive the e-course at TheRestaurantExpert.com.