Discuss the ways a manager (or other personnel) could best utilize a statement of cash flows to increase the profitability of a restaurant. Provide examples to support your response.
Most restaurant owners see growth as the solution to a cash-flow problem. That's why they often achieve their goal of growing the business only to find they have increased their cash-flow problems in the process. Plan for growth and the related cash outlays in advance, so they do not come as a surprise. In the meantime it is recommended that you take the practical steps to better manage cash flow, especially for the restaurant business:
- Businesses often have to extend credit to customers, particularly when starting out or growing. But you have to do your research beforehand to determine the risk of extending credit to each customer. Can they pay their bills on time? Is their busine