Capital Budget

Capital Budget

The firm has a capital budget of 18,399 for the full year, with the majority of expenditure planned in April. Whilst this does show prudence, as even if a proposed expenditure is delayed, it is still recognised at the start of the financial year, I would have to raise questions over the level of proposed capital expenditure. Whilst it is possible that the total expenditure for knives, utensils, cookware and food storage, other cutlery, crockery, tableware and glass ware would be as low as the budget predicts, given that the restaurant predicts almost 50,000 customers per year, with total revenue of over half a million pounds, I would predict that shrinkages, breakages and general losses would mean that further expenditure on these items would be necessary throughout the year.

The other expenditure classified under Equipment also seems to have very low amounts of expenditure budgeted. Assuming the 64.37 allocated to janitorial is to be used to purchase brooms, mops, buckets, vacuum cleaners, dusters and other cleaning products, I find it difficult to believe that such a busy restaurant will not spend many times more than this, especially given the high levels of wear and tear on the cleaning equipment that would be incurred through their required daily usage. Even worse, assuming that the 136.22 allocated to safety is also covering health and hygiene, both very necessary parts of any restaurant business, this seems a ridiculously low amount. A restaurant serving almost 50,000 customers should be spending much more that 0.003 per customer on health and safety, or it risk being investigated by food hygiene agencies and closed down. The budgeted amount would barely even cover the equipment required to keep flies and mice out of the kitchen.

With regards to the other expenditure: on machinery, tables, chairs, counter, television and vehicles (car), it is plausible that these are reasonable levels of budgeted expenditure, although there appears to be a...