Why Is a Restaurant Balance Sheet Important

Do you wonder what a restaurant balance sheet is for? Or better yet, how do you read a restaurant balance sheet? Watch this video, or continue reading below, to learn the answers to these questions and more.  

The balance sheet is a tool that shows you the health of your business. The simplest way to think about a balance sheet is like this: take your digital camera out and take a picture of your business. Print out the photo on your printer immediately. What you will see is a snapshot in time, showing what assets you have and who owns them.

How to Read a Restaurant Balance Sheet

One side of the balance sheet shows the assets of the restaurant. These assets are in the order in which they can most easily be liquidated. For instance, cash can be taken out of the bank today, but a building will take months or sometimes years to sell. The other side of a balance sheet shows the liabilities of the restaurant and to whom they are owed, or if they are a part of the owner’s...

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