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CFO Grade
Financial Health Report
Generated October 19, 2026
Report ID · c515d72e
FY 2025 · Full-Service Restaurant · USD · US
Roadside Diner & Pub
This report computes 24+ ratios across profitability, liquidity, solvency and efficiency, benchmarks them against typical operators in your industry (US regional set), and provides a prescriptive narrative for operator improvement.
CFO Grade report
Roadside Diner & Pub
FY 2025 · Full-Service Restaurant · USD
A weighted blend of profitability, liquidity, solvency and efficiency scores.
Revenue
$980,000
EBITDA
$24,000
Net Income
-$52,000
Total Assets
$387,500
Total Debt
$357,000
Equity
-$119,500
Operating CF
$38,000
Free Cash Flow
$20,000
Enterprise value
What your business is likely worth today.
Based on your industry's typical EV/EBITDA multiple applied to this period's EBITDA and adjusted for your CFO Grade quality factor.
Profitability
Where the money lives.
Operating Income
-$7,000
EBIT excl. other
EBIT
-$11,000
Earnings before interest & tax
ROA
-13.4%
Return on assets
ROE
43.5%
Return on equity
Debt & Solvency
Can the business carry its load?
Equity Ratio
-0.31x
Owner-funded portion
Liquidity
Can you cover next month?
Efficiency & Cash Flow
How fast does the business cycle cash?
Asset Turnover
2.53x
Revenue per $ of assets
DSO
2 days
Days sales outstanding
DIO
43 days
Days inventory outstanding
DPO
85 days
Days payables outstanding
Cash Conv. Cycle
-40 days
DSO + DIO − DPO
OCF Margin
3.9%
Cash from ops / revenue
Free Cash Flow
$20,000
2.0% of revenue
Insights
Where to focus, what to fix, what to ship.
Runway & Timeline
Act this monthThin cash cushion + distress signals
Cash on hand would cover only ~0 months of operating cost AND other ratios are stressed (negative net margin, DSCR below 1.0, or negative working capital). This combination demands immediate action: engage your lender, model a 13-week cash plan, and identify 15% cost cuts within 30 days.
Cash runway
0.4 mo
Monthly opex
34k
Deadlines that matter
- Within 7 days — Build a 13-week rolling cash flow forecast
- Within 30 days — Engage your primary lender about restructuring or extension
- Within 30 days — Identify cost cuts that can save 15% of monthly burn
Top 3 things to fix right now
If you only do 3 things this quarter, do these.
- 1
Debt service
Your DSCR of 0.29x falls below the 1.0x covenant floor banks require.
Fix it: Call your lender this week. Extend amortization or refinance — both lift DSCR fast without changing total interest paid.
Target: 1.25x DSCR. Math: a $181k/yr EBITDA lift gets you back to 1.25x.
- 2
Profitability
Net margin of -5.31% means the business is losing money on every dollar of revenue.
Fix it: List every recurring expense >$200/mo. Cut anything not directly tied to a customer or to revenue. Then re-price your top 5 SKUs.
Target: +3% net margin. You need to free roughly $81k/yr in costs or price.
- 3
Liquidity
Current ratio of 0.31 means your short-term bills outweigh your short-term assets.
Fix it: Build a 13-week rolling cash forecast in a spreadsheet THIS week. Most owners can't tell you their next 60 days of cash — that's the actual risk.
Visibility is the fix. You can't manage a crunch you can't see coming.
Tackle these in order — debt-service and profitability fixes compound first.
- Negative equity (-119,500) — liabilities exceed assets.
- DSCR is 0.29 — operations don't fully cover debt service.
These flags hard-cap the overall score so a borderline-stressed business can't show up as “Strong” just because its other ratios look fine.
- Gross margin 57.96% — pricing power and lean COGS. Scale here amplifies profit rather than eating into it.
- DSCR 0.29x — CRITICAL. Operating cash flow does not cover annual debt service. This is a covenant breach in waiting; most lenders refuse refinancing below 1.0x. Fix it: call your bank this week to extend amortization (5→7 years cuts service ~25%) or pursue an SBA 7(a) refinance before the next covenant test.
- Net margin -5.31% — the business is losing money on a net basis. Unsustainable beyond 1–2 periods without intervention or capital. Fix it: stop the bleed first — list every recurring expense >$200/mo and cut anything not tied to a customer or revenue. Most SMBs find 5-8% of opex this way in one afternoon.
- Debt/EBITDA 14.88x exceeds the 4.0x ceiling most banks underwrite to. Expect borrowing costs 200–400 bps over peers. Fix it: the only durable lever is growing EBITDA. Refinance to extend term in the meantime, and re-run this report each quarter — when the multiple drops below 3.5x your borrowing costs reset.
- Current ratio 0.31 — current liabilities exceed current assets. Working capital is technically negative; a single mis-timed payment could cause a crunch. Fix it: build a 13-week cash forecast this week so you see crunches two weeks out. Negotiate 30-day extensions on your top-3 supplier payables to buy breathing room.
- Quick ratio 0.08 — liquidity is tight once inventory is excluded. Cash and AR alone won't cover current obligations. Fix it: secure a revolving line of credit BEFORE you need it (banks lend to the strong, not the desperate). Target a facility ≥2 months of operating expenses.
- Interest coverage -0.27x — operating earnings barely cover interest expense. Even a small operating downturn would trigger a covenant test. Fix it: lock in fixed-rate refinancing if your current debt is variable-rate. Every 100 bps you remove from your weighted rate adds roughly 0.3x to interest coverage.
- Audit operating expenses for a 5% cut without touching customer-facing roles — vendor SaaS, insurance, subscriptions. Estimated impact: ~$0.
- Extend amortization on senior debt from 5 to 7 years. Lifts DSCR by 0.3–0.4× with no impact on total interest paid.
- Run customer concentration analysis — identify which 3 customers represent the largest slice of $980k revenue. If >40%, diversification is your highest priority.
Score levers
Three moves that would change your grade the most.
Pre-baked sensitivity from the What-If sandbox. Each one shows the math: where you are now, where you'd be after the move, and how to get there.
Debt service
Read in 30sGet DSCR to 1.50x
0.29x DSCR 1.50x DSCR
How: Extend amortization on senior debt OR lift EBITDA via margin/price — both move DSCR roughly equally fast.
Now
D-
35/100
After
D
41/100
Operating leverage
Read in 30sCut operating expenses 5%
-0.7% operating margin 1.8% operating margin
How: Audit SaaS subscriptions, insurance, vendor contracts. Almost every SMB has 5% hiding in plain sight.
Now
D-
35/100
After
D
40/100
Liquidity
Read in 30sBuild a 13-week cash forecast
0.31 current ratio 0.61 current ratio
How: Stretch supplier terms to net-45, sweep idle cash, secure a small revolving line BEFORE you need it.
Now
D-
35/100
After
D-
38/100
If I were your banker
The questions these numbers raise — rehearse before the meeting.
- Q1.
Debt service
"Your DSCR is 0.29x. Walk me through the assumptions that get you to a comfortable 1.5x within 12 months."
Why they ask: Lenders want to see a credible bridge to bankable cushion, not just hope.
- Q2.
Operating leverage
"Operating margin is -0.7%. Where would the first 5% of OpEx come from if you needed it tomorrow?"
Why they ask: Knowing exactly where the fat is — vendors, SaaS, headcount, real estate — signals operational maturity.
- Q3.
Leverage
"You're at 14.9× debt/EBITDA. What's the plan to get below 3.0x, and over what timeframe?"
Why they ask: Most senior lenders cap underwriting at 3.0-4.0x; anything above needs a credible deleveraging story.
- Q4.
Interest burden
"Interest coverage is -0.3x. How much of your debt is variable-rate, and what's your hedging strategy?"
Why they ask: Variable-rate exposure in a rising-rate environment is the single most common cause of covenant breaches.
- Q5.
Path to profitability
"You're at -5.3% net margin. What specifically changes in the next 12 months to get you to break-even?"
Why they ask: Lenders need to underwrite the *forward* business, not the rear-view mirror. Vague turnaround stories don't get funded.
- Q6.
Liquidity
"Your current ratio is 0.31. Do you have a committed revolving line of credit, and at what utilization?"
Why they ask: A small revolver utilized 80%+ is a yellow flag; an unused revolver is a green flag.
- Q7.
Customer concentration
"What percentage of revenue comes from your top customer? Top 3?"
Why they ask: Anything above 30% from a single customer is a structural risk. Above 50% is often disqualifying for senior debt.
- Q8.
Owner involvement
"If you stepped away for 90 days, what specifically would break first?"
Why they ask: Lenders and buyers price key-person risk into their offers. The fewer things break, the higher the price.
Industry-specificIn the paid report
What matters most for your sector.
Beyond the universal ratios, here are the operating KPIs that bankers, accountants and smart operators in this sector watch first.
Food cost %
COGS as a share of revenue. The single biggest controllable line in restaurants.
42.0%
Out of range
- Renegotiate top-3 vendor contracts
- Reduce waste — track shrink weekly
- Reprice or remove low-margin menu items
Labour % (proxy)
Estimated labour cost as a share of revenue. Sweet spot is high-20s to low-30s.
35.8%
Below median
- Tighten scheduling vs. forecasted covers
- Cross-train to reduce overtime
- Renegotiate management bonus structure
Prime cost % (food + labour)
Food + labour combined. Best operators run prime cost at or below 60%.
77.9%
Out of range
- Push prime under 60% via menu engineering
- Adjust portion sizes on highest-volume items
- Eliminate unprofitable shifts
Occupancy % (proxy)
Estimated rent + utilities as % of revenue. Above 12% is a red flag for rent burden.
19.3%
Out of range
- Negotiate percentage-rent caps at lease renewal
- Sublet underused space
- Increase covers per square foot
EBITDA margin
Cash earnings power. Independent restaurants typically run 8–18%.
2.5%
Out of range
- Lower prime cost
- Drive average check via upsell
- Cut fixed overhead
Peer commentary · Restaurant / Food Service
What the peer data above actually means for you.
On profitability, you're tracking below the median for Restaurant / Food Service. That doesn't necessarily mean the business is broken — it usually means one of three things: you're underpricing relative to peers, your COGS structure has slack a peer benchmark would tighten, or you're carrying overhead the size of the business doesn't yet support. Each is fixable, but the diagnostic determines which lever to pull first.
On debt and coverage, you're more leveraged than typical peers — meaning a higher cost of capital, tighter covenants, and less margin for operational error. The good news: leverage is the easiest ratio to improve durably. Sweep a fixed percentage of FCF to senior debt principal each month and the multiple comes down quarter-over-quarter regardless of revenue swings.
On working capital, your cash conversion cycle is favorable relative to peers — collections are tighter, inventory turns are quicker, or payables are stretched further than the typical operator. That's structural cash you're not having to borrow. Document the operational habits that produce it; they're a hidden asset most owners don't realize they have.
Risk-adjusted valuation range
What your business might be worth — to a lender vs a buyer.
Lender view
What a lender would underwrite against
Banks use a haircut multiple of EBITDA (typically 2-3×) to size senior debt facilities. This is what they'd consider when stress-testing your debt capacity.
Buyer view
What a strategic buyer might pay
Low · Mid · High
Enterprise value range using typical industry multiples. The mid figure is the starting point most deal conversations begin from; real outcomes vary heavily with growth rate, customer concentration, recurring revenue mix, and deal structure.
What if you improve your margin?
Drag the slider to see how a change to your EBITDA margin moves the buyer range. Baseline: 2.5% EBITDA margin.
Projected margin
2.5%
These are rules-of-thumb estimates — not a formal valuation. Real-world outcomes depend on buyer/lender, deal structure, growth trajectory, key-person risk, and dozens of factors not captured in a snapshot. Use this as a directional reference for conversations, not a price tag.
If you skip the action plan
What happens if these numbers stay the same.
If you do nothing for 30 days
Cash runway shrinks below the threshold where credible refinancing becomes possible. Lenders prefer borrowers who come to them BEFORE the crisis, not during.
If you do nothing for 90 days
At your current burn, runway drops below 0.0 months. Vendors start moving you to COD, employees notice paychecks getting tight, and your operational flexibility evaporates.
If you do nothing for 6 months
You will be having very different conversations: with bankruptcy counsel, with potential distressed-asset buyers, or with creditors negotiating from a position of zero leverage. Most of the options that exist today won't exist then.
Improvement IdeasIn the paid report
Specific moves that change the numbers.
High priority
High priority
Refinance senior debt to a longer amortization
With DSCR at 0.29x and Debt/EBITDA at 14.88x, your annual debt service is the constraint on growth investment. Extending amortization eases the cash burden without raising total interest paid materially.
- Talk to your existing bank about extending the amortization from 5 to 7 years.
- Get a competing quote from one regional bank and one credit union.
- Consider an SBA 7(a) refinance if your current loan is conventional — longer terms are standard.
High priority
High priority
Build a 13-week rolling cash flow forecast
Current ratio 0.31 means working capital is tight. A weekly cash forecast turns 'are we ok?' into a specific answer with two weeks of warning before any crunch.
- List every expected inflow (collections by customer) and outflow (payroll, AP, debt, tax) week by week.
- Track variance weekly — over time the forecast tightens.
- Set a target minimum cash balance and trigger collections / draw a line of credit when you approach it.
Medium priority
Medium priority
Run a customer concentration audit
At $980k of revenue, the loss of one anchor customer can be terminal. Lenders and acquirers haircut valuation 15–30% when top-3 customers exceed 40% of revenue.
- Sort revenue by customer for last 12 months. Calculate % from top-3 and top-10.
- If top-3 > 40%, build a quarterly diversification plan with measurable new-customer targets.
- Add concentration to the monthly KPI dashboard — it should never surprise you.
Low priority
Low priority
Model your exit valuation now
At $24k EBITDA and a 3–6× multiple typical for Restaurant / Food Service, this business would trade between $72k and $144k. Knowing the number changes how you operate.
- Identify the 2–3 levers that move EBITDA most (margin, scale, or customer concentration).
- Track 'add-backs' (owner comp above market, one-time costs) — they directly lift sale-able EBITDA.
- If you're 3–5 years from exit, start cleaning the data room now: contracts, financials, customer lists.
Low priority
Low priority
Establish a 'sweep' allocation for free cash flow
Most SMBs treat free cash flow ad-hoc. A pre-committed allocation rule (e.g., 50% debt paydown, 30% growth investment, 20% reserve) compounds outcomes without daily decision-fatigue.
- Pick a split. Common: 50/30/20 (paydown / reinvest / reserve).
- Automate the transfer monthly from the operating account.
- Review the split annually as financial position evolves.
Peer Benchmarks
How you stack up against peers.
Labor and food cost run ~60-70% of revenue; thin margins with high operating leverage.
Gross margin
peer 58–72% · median 65%
57.96%
Below peer range
EBITDA margin
peer 10–19% · median 14%
2.45%
Below peer range
Operating margin
peer 4–14% · median 9%
-0.71%
Below peer range
Net margin
peer 3–10% · median 6%
-5.31%
Below peer range
Current ratio
peer 0.9–1.6x · median 1.2x
0.31x
Below peer range
Quick ratio
peer 0.3–1x · median 0.6x
0.08x
Below peer range
DSCR
peer 1.25–2x · median 1.5x
0.29x
Below peer range
Debt / Equity
peer 0.8–2.5x · median 1.5x
-2.99x
Above peer
Debt / EBITDA
peer 2–4.5x · median 3x
14.88x
Below peer range
Interest coverage
peer 2–7x · median 4x
-0.27x
Below peer range
DSO
peer 1–10d · median 3d
2.23d
Top of range
DIO
peer 5–18d · median 10d
42.52d
Below peer range
DPO
peer 20–45d · median 30d
85.05d
Above peer
Cash conv. cycle
peer -25–5d · median -10d
-40.3d
Above peer
OCF margin
peer 5–14% · median 10%
3.88%
Below peer range
FCF margin
peer -2–8% · median 3%
2.04%
Below median
Advisor MemoIn the paid report
A senior CFO's read on your numbers.
Executive Summary
Roadside Diner & Pub earned a CFO Grade of D (35 / 100 — Stressed) for FY 2025. Revenue $980k, EBITDA $24k (2.5% margin), DSCR 0.29x, Current Ratio 0.31x. The fundamentals need attention — the playbook below prioritizes the levers with the biggest impact. Memo composed from your computed metrics while the AI advisor warmed up.
What's Going Well
Gross margin 58.0% — healthy unit economics; each sale carries enough profit to absorb shocks and fund growth.
What's Worrying
DSCR 0.29x — CRITICAL. Operating income does not cover annual debt service. This is a covenant breach in waiting. Most lenders will not refinance at this level. Leverage at 14.88x Debt/EBITDA exceeds the 4.0x ceiling most banks underwrite to. Borrowing costs will be elevated 200-400 bps over peers. Current ratio 0.31x — current liabilities exceed current assets. Working capital is technically negative; one bad month and payroll could be at risk. EBITDA margin 2.5% is thin. The business has no buffer to absorb input-cost increases or pricing pressure. Net margin -5.3% — the business is losing money on a net basis. This is unsustainable beyond one or two periods without intervention.
Risks & Challenges Ahead
Customer concentration risk — at $980k revenue scale, losing one or two anchor customers can be terminal. If your top-3 customers are >40% of revenue, plan diversification this quarter. Refinance risk — current cash flow (0.29x DSCR) combined with leverage (14.88x Debt/EBITDA) means a balloon-payment refinance in a tightening rate environment could cost an additional 200-400 bps in interest. Negative working capital of -$142k — the business is funding short-term operations with short-term liabilities. A single payment timing mismatch (large supplier invoice, payroll spike, tax bill) could trigger a liquidity crisis.
Strategic Questions You Should Be Asking Yourself
What does the P&L look like at –20% revenue? Model it now. If EBITDA goes negative at that level, you have concentration risk you haven't priced in. Who are your top-3 customers, and what % of revenue do they represent? If the answer is >40%, you have a concentration problem dressed up as a sales win. If you wanted to sell this business in 24 months, what would a buyer pay? Multiples of EBITDA in your industry typically range 3-6x for SMBs. At $24k EBITDA that's roughly $72k–$144k. Is that the number you wanted? What is the one number on this report that, if it improved by 20%, would change the most about your business? Find it. Build a 90-day plan around moving only that lever. Where is the next 100 basis points of margin coming from — pricing, mix, or cost? Vague answers here mean the margin won't materialize. Be specific.
Margin Improvement Playbook
Audit operating expenses for 5% cut without touching customer-facing roles — renegotiate vendor SaaS contracts, consolidate insurance, audit subscriptions. Estimated annual impact: ~$0. Extend amortization on senior debt to reduce annual debt service and lift DSCR. Refinancing a 5-year note to 7-year amortization typically lifts DSCR by 0.3-0.4x with no impact on total interest paid.
Capital Structure & Cash Runway
Annual debt service is $83k; EBITDA at $24k yields DSCR 0.29x, which is below bankable threshold. Stress-tested at –25% EBITDA, DSCR would be 0.22x. On an EBITDA exit-multiple basis (3-6x typical for SMBs), this business would trade between $72k and $144k. Lenders will look at Debt/EBITDA (14.88x) and interest coverage (-0.27x) before deciding terms.
Operating Performance vs. Restaurant / Food Service
Gross margin: 58.0% Operating margin: -0.7% Net margin: -5.3% DSO: 2 days · DIO: 43 days · DPO: 85 days · CCC: -40 days
30 / 60 / 90 Day Focus
30 days — Pick the single weakest metric in 'What's Worrying' above and build a one-page action plan. Renegotiate the top-3 supplier contracts. Review the top-5 slow-paying customers and tighten collections.
60 days — Lock in 1-2 of the levers from the playbook with measurable monthly targets. Run a –20% revenue stress scenario through your P&L and budget. Build a 13-week rolling cash flow forecast.
90 days — Re-run CFO Grade with this period's numbers and compare. The goal is a one-letter-grade lift per quarter. Each grade-tier shift is roughly worth a 0.5-1.0x bump in exit multiple.
- ---
Memo auto-composed from your computed metrics while the AI advisor warmed up. All numbers above tie directly to your input data — no hallucinations. Re-run analysis in a few minutes for the full AI narrative with industry-specific colour.
In Plain EnglishIn the paid report
What it all means, without the jargon.
The bottom line
Your business is struggling and needs attention soon.
The CFO memo, in plain English
Your business, explained like a friend who's also a CFO.
Here's the honest read on Roadside Diner & Pub. You pulled in $980k in revenue this period, and after paying for everything it takes to run the business you were left with $24k in EBITDA — that's a thin 2.5% margin. Against typical operators in Full-Service Restaurant, that earns you a CFO Grade of D (35/100), which classifies the business as stressed right now. Your business is struggling and needs attention soon.
The strong stuff first. A 58.0% gross margin suggests you've got pricing power and disciplined cogs. These aren't accounting tricks — they're earned operational discipline. Whatever you're doing in those areas, document it so it survives a key-person departure.
Now the stuff that needs attention. Net margin is -5.3% — you're losing money on every dollar of revenue; dscr of 0.29x is below the bankability line — a single bad quarter would put you in covenant territory; debt at 14.9× ebitda is into the 'expensive borrower' zone — refinancing costs will eat real money. None of these are necessarily fatal on their own, but they compound — a tight DSCR plus a stretched DSO plus high leverage is how good businesses end up in distressed-debt situations. The cure is straightforward but takes focus: address the highest-severity item first and the rest get easier.
Your next 90 days, if I were sitting across from you with a coffee: week 1: build a 13-week cash flow forecast so you can see crunches coming two weeks out · month 1: get on the phone with your senior lender about an amortization extension or covenant waiver · month 3: hit your re-run of this report with measurable improvement on the top 3 fixes above. That's the playbook. The hard part isn't knowing — it's doing it without 14 other things distracting you.
The long view. This report exists because reading hard truths early is the difference between a turnaround and a closure. Every business that's ever fixed itself started here — looking at the numbers honestly and picking the single most urgent fix to address first. The path forward is narrower than the path you've been on, but it's a path. Take the next step. The rest follows.
How you're doing
You earned $980k in revenue this period. After paying for everything it takes to run, you have about $24k left over each year — a very thin margin. Compared to similar businesses in your industry, you scored 35 out of 100 (grade D) — that's how an investor or banker would size you up at a glance.
What's working
You keep about 58 cents of every dollar you sell after paying direct costs. That's strong — it means your product or service is priced well and your costs are under control.
What's worrying
You only have about 0 months of cash if revenue stopped or if things got worse. That's not a planning timeline — that's a 'fix it now' timeline.
What to do next
Pick the single most urgent action from the 'Deadlines that matter' section above and do it this week. Don't wait for next quarter — at this severity, a month of inaction is the difference between recoverable and not.
What this means for borrowing money
A bank looking at these numbers right now would say no. You're not covering your debt payments from operations, which is the single biggest red flag in lending. Fix this before you talk to any lender — see the Top Fixes section above for how.
What this means if you wanted to sell
You could sell, but at a discount. $24k in EBITDA gives you a base value, but thin margins or operational concerns will push the multiple to the lower end of the range (2-4×). A year of margin improvement before listing would meaningfully change your asking price.
What this means for your taxes
On the bright side of a tough year: businesses that lose money typically owe little or no income tax, and the loss can often be carried forward to offset profits in future years (NOL rules vary by country). Talk to your accountant about preserving that benefit — it's worth real money once you turn the corner.
Your runway in plain English
At your current rate of spending and current cash on hand, you have about 0.4 months before you run out. That's not 'months until something breaks' — that's months until the bank account is empty. This is the single number you should look at every Monday morning until it's safely past 12 months.
The takeaway
This is not the end — it's a clear picture so you can act. Every business that's ever turned around started with someone willing to read a report like this honestly. Pick the most urgent action and start there. The rest follows.
Generated automatically from the figures provided. Industry benchmarks are typical mid-range estimates for SMB operators in the selected sector.