Tools for restaurant financial analysis – Part IV

 In 1. David Scott Peters, The Numbers, Tip of the Day

By David Scott Peters

Restaurant Tip of the Week

Payback period

The payback period is the number of years it takes to recover the initial investment and is calculated by counting the number of years it takes for the restaurant’s cumulative free cash flow to equal zero. Note that some investors require a faster payback for a riskier investment. The calculation is investment divided by the net profit.

Investment/Net profit = Payback period

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 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

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