Flashcards in Financial Management Deck (24)

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1

## How to calculate current ratio

### current assets/current liabilities

2

## Define liquidity

### an organizations ability to pay bills

3

## define solvency

### an organizations ability to meet long-term financial obligations

4

## how to calculate solvency ratio

### total assets/total liabilities

5

## how to calculate debt to equity raito

### total liabilities/total owner's equity

6

## define activity

### how effectively an organization uses assets

7

## how to calculate food inventory turnover

### cost of food sold/average food inventory

8

## how to calculate average inventory

### (beginning food inventory + end food inventory) / 2

9

## define profitability

### how effective management is generating sales, controlling expenses, and providing a profit

10

## how to calculate profit margin

### net profit/sales

11

## how to calculate return on equity

### net profit / equity

12

## how to calculate return on assets

### net profit / total assets

13

## define operating

### how successful is the org in generating revenue and controlling expenses

14

## how to calculate average customer check

### total sales / # guest served

15

## how to calculate seat turnover

### covers served / number of seats

16

## how to calculate food cost percent

### cost of food sold / food sales

17

## how to calculate labor cost percent

### cost of labor (including salaries, wages, and benefits) / total sales

18

## how to calculate food cost per patient

### food cost / number of patients served

19

## how to calculate meals per labor hour

### meals served / number of labor hours needed to produce the meals

20

## how to calculate labor minutes per meal

### minutes of labor needed to produce meals / number of meals served

21

## how to calculate meals per FTE

### meals served / number of FTEs to produce the meals

22

## how to calculate selling price of a menu item using the food cost percentage method

### item food cost x (100/percent income desired from food)

23

## define item contribution margin

### aka gross profit margin, about that remains after food cost of a menu item is subtracted from the selling price of that item

24