As a restaurant owner, you may occasionally want to know what your business is like on a given day. The balance sheet is like a financial snapshot of your restaurant. It lists the value of all your restaurant’s assets and liabilities. Total liabilities are subtracted from total assets to generate a net worth or net value of your company on a particular date.
When looking at a balance sheet, it is important to keep in mind that you are only looking at the financial situation of your restaurant on a specific date. The balance sheet might look entirely different on another day. Investors use balance sheets to look for trends to determine the overall health of your business. Does your restaurant usually have a positive or negative net worth? Is it gaining or declining in net worth? They are interested in long-term trends and are not looking at balance sheets for specific periods in time.
The following is a sample balance sheet. You can input the values depending on your restaurant’s situation. You may have different types of assets and liabilities. Here is what a typical balance sheet looks like:
|Accounts Receivable||Accounts Payable|
|Food Inventory||Taxes Owned|
|TOTAL CURRENT ASSETS|
|TOTAL FIXED ASSETS||TOTAL LIABILITIES|
Assets are listed on the left hand side and are categorized as either Current Assets or Fixed Assets. (Current assets are any assets that are expected to or can be easily converted to cash within a year. Fixed assets are any assets that take longer than a year to convert to cash.) Add up all your assets to determine the total assets for your restaurant.
Liabilities are listed on the right hand side. Like assets, liabilities are classified as current or noncurrent/long-term. (Current liabilities refer to items that are expected to be satisfied within the next twelve months, such as paying your food vendor for a purchase. Noncurrent liabilities are those liabilities that are not expected to be satisfied within the next twelve months.) Determine the total liabilities of you restaurant by adding up all the liabilities.
The net worth of your restaurant is the difference between the total assets and the total liabilities. This is the value of your restaurant on a particular day.