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Running Your Business: How Four Overlooked Numbers Cost You Money By David Scott Peters
As an Assistant Manager of a full-service restaurant and bar, I was taught how to complete the standard Cost of Goods Sold calculation, the same calculation every new manager is shown: Beginning inventory plus purchases equals total available. Total available minus ending inventory equals total product used. Total product used divided by sales equals Cost of Goods Sold percentage.
That was easy to master, but I had a challenge. As I climbed the ranks of management into an operations role, my kitchen managers were creating good numbers on paper, but our bank account did not reflect those positive numbers. And I learned quickly that profits on paper do not pay the bills; CASH PAYS THE BILLS.
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