.621.53Receivables Turnover170.35120.40194.59128.70 Liquidity RatiosCurrent Ratio0.350.410.380.33Quick Ratio0.190.220.230.19 Leverage RatiosDebt to total assets0.490.490.450.41Time Interest Earned11.648.484.389.82Fixed charge coverage6.205.003.253.89 KEY BENCHMARKS SPECIFICS TO THE INDUSTRY SEGMENTIn order to analyze how well a restaurant is operating, the management needs to measure the efficiency and effectiveness of its standards and operating procedures. Comparison of sales and expenses to various factors can help identify in which areas action needs to be taken and corrections made. The restaurant industry uses a number of ratios for benchmarking such as average check, seat turnover, food & beverage costs, labor costs or revenue per employee.Average checkThe average check is calculated as follows: This figure shows the sales generated for each customer served. The average check can be calculated separately for food and beverage. It is then compared to the industry average. If the average check is too low for a particular restaurant segment, every part of the operation must be analyzed to determine where the sales generating potential is not being exploited (e.g. menu, personnel, concept, procedures, etc.). If it is too high, the restaurant might be overpricing its menu and could risk losing customers to the competition.Seat turnoverThis ratio effectively shows how many guests are served per available seat in the restaurant. If the figure increases, revenue increases. Seat turnover is calculated as follows: Food costThe food cost is calculated as follows:food cost = beginning inventory + purchase ending inventory The above ratio is used to determine if the costs incurred from the purchase, transportation delivery and storage of food meet the budgeted figures. A lower than budgeted food cost potentially means standard portions are too small or the restaurant is purchasing low quality products. A higher figure means that the co...
