Profit Loss Analysis

Goals

To analyze the P&L statements for Kitchen on Kent, Melba Restaurant, Eight Restaurant, and the Food Gallery.

Early Findings

  • Since all businesses being evaluated are Australian restaurants, it was assumed that all amounts were in Australian dollars (A$) unless indicated otherwise in the reports.

Kitchen on Kent

  • The net revenue for the restaurant for the year ended 12/31/19 was A$2,607,605. This was A$1,122,106 (3,729,711-2,607,605) less than the budgeted amount of A$3,729,711. Therefore, the actual sales for 2019 were 30.1% (1,122,106/3,729,711*100) below projections.
  • It was projected that food would account for 81.1% of sales and beverages would make up the remaining 18.9% for 2019. Actually, food accounted for 92% of sales, and beverages accounted for 8%.
  • The cost of sales for food and beverage was expected to be A$1,354,444 in 2019, but the actual cost was A$1,035,055. The actual cost was A$319,389 (1,354,444-1,035,055) less than budgeted, which is 23.6% (319,389/1,354,444*100) less than projections.
  • The payroll and related expenses totaled A$1,846,830 for 2019, which was A$36,441 (1,846,830-1,810,389) more than the budgeted amount of A$1,810,389. Therefore, actual payroll related expenses were 2.0% (36,441/1,810,389*100) more than budgeted for 2019.
  • Other expenses were projected to be A$225,145 for the year, while actual other expenses came in at A$302,134, which was A$76,989 (302,134-225,145), or 34.2% (76,989/225,145*100), over budget.
  • Net income for the year was budgeted at A$339,734, but the company actually lost A$576,414. This was 269.7% [(339,734-(-)576,414)/339,734*100] less than projected.

Melba Restaurant

  • The net revenue for the restaurant year-to-date through 10/31/19 was A$9,460,943. This was A$877,587 (10,338,530-9,460,943) less than the budgeted amount of A$10,338,530. Therefore, the actual sales through October 2019 were 8.5% (877,587/10,338,530*100) below projections.
  • It was projected that food would account for 89.4% of revenue and beverages would account for 10.4%. The actual numbers through October were very similar with food representing 90.7% and beverages 9.2% of total revenue.
  • The cost of sales for food and beverage was expected to be A$2,924,882 through October, but the actual cost was A$2,740,254. The actual cost was A$184,628 (2,924,882-2,740,254) less than budgeted, which is 6.3% (184,628/2,924,882*100) less than projections.
  • The payroll and related expenses totaled A$4,938,711 through October 2019, which was A$265,396 (5,204,107-4,938,711) less than the budgeted amount of A$5,204,107. Therefore, actual payroll expenses were 5.1% (265,396/5,204,107*100) less than budgeted.
  • Other expenses were projected to be A$370,044 through October, while the actual other expenses came in at A$436,144, which was A$66,100 (436,144-370,044), or 17.9% (66,100/370,044*100), over budget.
  • Net income through October 2019 was budgeted at A$1,839,497, but the company actually made A$1,345,834. This was 26.8% [(1,839,497-1,345,834)/1,839,497*100)] less than projected.

Proposed next steps:

You need to be the project owner to select a next step.
We propose continuing the analysis to provide the requested information for the Eight Restaurant and the Food Gallery, using the same format that was used for the two restaurants in this request.
If there are any other restaurants of interest, we propose conducting a similar analysis for 3-4 more restaurants. If this option is selected, please identify the restaurants.