Presentation

BSBFIM601 – Manage finances

Explain that the management is considering the closure of the Cairns restaurant
The financial position of cairns restaurant analyzed in the
previous sector, the restaurant department was making
losses. This has prompted the management of the store
to consider closing down the restaurant department.
Doing so, traditions restaurant is will be faced with
various implications, both financial and non financial.
Currently, the restaurant department is making losses
and as such, it is her responsibility to advice the
management whether to close down the restaurant or to
put more capital in it so as to make it more profitable 
 Reasons for closing
The contribution margin will increase leading to
reduction in profits
Since fixed costs per period of time do not vary by the
amount of units produced, the other three
departments will have to incur these costs. This will
increase the overall costs leading to reduced profits.
Explain the new budget you have developed for
Melbourne for the Current Year (Year Y)
a.Total Sales (including all line items)

Sales Current Year (Year Y3) Budgets

Restaurant beverage sales 77,818

Restaurant food sales 129,720

Catering sales 46,644

Total Sales 254,182

 Operating Expenses (including all line items)

Operating Expenses Current Year (Year Y3) Budgets

Food and beverage cost (direct cost of sales) 110,244

Advertising 5,854

Bank Service Charges 258

Credit Card Fees 258

Insurances 6,180

Payroll 62,364

Professional Fees 1,352

Rent or Lease 15,360

Hospitality Supplies 3,893

Licenses 1,648

Utilities and Telephone 3,152

Equipment Leases 4,635

Maintenance 734

Total Operating Expenses 215,931

 Net Profit Before Tax

Net Profit Before Tax Current Year (Year Y3) Budgets

Net Profit Before Tax (EBIT) 38,252

Corporate Taxes 10,902

Net Profit

Net Profit Current Year (Year Y3) Budgets

Net Profit (or Net Income) 27,350

Ensure that managers and accounts
officer understand reporting
requirements
Managers:
Develop daily sales and expenses reports for Finance
Manager, in conjuction with Accounts Officer
Oversee monthly financial reporting for CEO, including:
oCash flow reports oAgeing summary
Accounts officer:
Develop daily sales and expenses reports for Finance
Manager, in conjuction with Restaurant Managers
Develop monthly finance reports for Finance Manager and
CEO, including: oCash flow reports oAgeing summary
Ensure that managers and accounts
officer understand financial
delegations
Manager:
Comply with Financial Management Policy.
Authorise Supplier Claim Forms.
Process petty cash expenditure at restaurants.
Delegation authority - $20,000
Accounts officer:
Comply with Financial Management Policy.
Process petty cash expenditure at Corporate Office.
Delegation authority - $1,000
 Recommendations
Based on a survey of similar businesses across Australia, it was
determined that an LRG restaurant with five full-time staff members
could be expected to have the financial goals for each restaurant for
the coming year:

 Increase net earnings from beverage sales by at least 15% in all

restaurants
 Achieve 10% of sales through catering at all restaurants
Holding spending, as a percentage of sales, at a steady rate, at all
restaurants
Increase net earnings from food sales by at least 10% in all restaurants