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SVB vs RVS: Profitability Case Study

The document compares the financial performance of two similar businesses, RVS and SVB. RVS had lower average sales per customer, higher food and beverage costs, and higher payroll expenses, leading to lower profits compared to SVB despite having more customers.

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shamlee ramteke
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23 views3 pages

SVB vs RVS: Profitability Case Study

The document compares the financial performance of two similar businesses, RVS and SVB. RVS had lower average sales per customer, higher food and beverage costs, and higher payroll expenses, leading to lower profits compared to SVB despite having more customers.

Uploaded by

shamlee ramteke
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

SVB VS RVS

A case study
Particulars RVS SVB
!00 Cover 50 covers
6 a.m. – 11 p.m. 6 a.m. – 11 p.m.
Sales
Food sale 5,593,000 2,762,500
Beverage sale 987,000 487,500

Total 6,580,000 3,250,000


Cost of sale
Cost of food sold 2,237,200 966,870
Cost of beverage Sold 296,100 121,880

Total 2,533,300 1,088,750

Gross Profit on sale 4,046,700 2,161,250

Controllable Expenses
Pay roll 1,579,200 650,000
Payroll taxes and employee benefits 394,800 162,500
Other controllable expenses 987,000 487,500
Total 2,961,000 1,300,000

Profit before Occupation cost 1,085,700 861,250


Occupation cost 658,000 325,000
Profit before Depreciation 427,700 536,250
Depreciation 329,000 162,500

Profit before Income tax 98,700 373,750


WHAT WENT WRONG FOR RVS
Particulars RVS SVB

Average sale per 60/- 59/-


cover
Cost of food 40% 35%

Cost of beverage 30% 25%

Combined cost of 38.5% 33.5%


F&B
Gross profit 60% 65%

Payroll expenses 24% 20%

Payroll tax 6% 5%

Controllable 15% 15%


expenses

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