FORREST QUINN GUEST POST

Short Term Aberration or Long Term Trend?

Management posted Yorktown Grill’s 11-day August income statement on SCA’s website. Revenues were impressively higher than expected – $63,430. However, Yorktown Grill lost $22,896 during those eleven days – over a $2,080/day loss. That equals about a $7.22/loss per meal. 

After a novelty surge, Yorktown Grill’s daily sales are down 28% within a month:

August 20-31 (11 days) – $5,766/day

September 1-14 (14 days) – $5,086/day

September 15-27 (13 days) – $4,154/day

Per the financial analysis prepared two years ago, the restaurant’s breakeven point (revenues – expenses = 0) was about 300 meals/day @ $16/meal, or $4,800/day.   But in August, Yorktown Grill’s $5,766/day in revenue resulted in a $2,080/day loss – What happened?