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Financial Terms

Forecasting and financial budgeting have a lot in common. A great deal of guesswork, backed up with facts, experience and a sense of history, are all
© International Culinary Studio

Forecasting and financial budgeting have a lot in common. A great deal of guesswork, backed up with facts, experience and a sense of history, are all combined to try and predict the future.

Budgets

Are defined as a financial plan and may be described as a realistic expression of management’s goals and objectives expressed in financial terms. Many businesses establish budgets for specific aspects of operation. Thus, there are sales budgets, cash flow budgets, capital equipment budgets, and advertising budgets among many other possibilities.

Percentages

Percentages are used to express financial ratios. These ratios are used to measure performance.

For example, a company may require that:

  • The salaries and wages must be 28% of total turnover.
  • The food cost must be 32% of sales.

These percentages make it easy to track performance.

Turnover

Is the total income of a business.

Business forecast

Predictions of unit sales, or expressed in monetary terms, normally based on historical data.

For example:

400 covers $6 500 per day $35 000 per month
© International Culinary Studio
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