Profit & Loss Statement
A profit and loss statement is a financial statement that summarizes the revenues, costs and expenses incurred during a specific period of time, usually a fiscal quarter or year.”
A profit and loss statement can go by many names such as a P&L, income statement, earnings statement, revenue statement, operating statement, statement of operations, and statement of financial performance.
Restaurant Profit & Loss
A restaurant profit and loss statement is a monetary statement that lists the sales, costs, and expenses of your restaurant in a set period of time. This financial statement enables you to analyze your restaurant's financial progress. You'll be able to see exactly where your restaurant is making or losing money, so you can take the necessary steps to improve your bottom line.
A restaurant P&L statement usually includes the following 2 main sections:
Section 1: A breakdown of your sales
Section 2: Costs
The costs section usually includes the following information:
Cost of goods sold (COGS)
P&L statement also enables you to calculate food cost percentage, gross profit, and net profit or loss. These metrics can be calculated from your sales, COGS, and costs, and they allow you to fully understand your restaurant's financial state.
Restaurant Profit and Loss Statement Breakdown
Section 1: Sales
In this section, you should list out all of the items that contribute to your total sales. This will include the products from all of your revenue streams and how much money each specific item has brought in.
Section 2: Costs
In this section, include a list of all of your restaurant's expenses. Below is a list of the main expenditures you will encounter as a restaurant owner.
Cost of Goods Sold
The cost of goods sold (COGS), or cost of usage, refers to the cost to your restaurant of the food and beverages sold to your customers in a given time period. You can list out each individual item using your existing inventory system, calculate the cost of each product, and add them up to get your total COGS. Later, we will go through the equation for COGS and other useful restaurant calculations.
From your head chefs to your bussers, salaries and hourly wages for all employees make up your restaurant labor cost. The key element to controlling your restaurant labor cost is to understand how many employees you need to provide consistent and effective service without scheduling too many people.
Restaurant operating expenses include everything involved in your daily operations, such as supplies, repairs, and marketing. You can include occupancy expenses here or choose to make a separate section. Occupancy expenses include overhead costs and everything related to occupying a space, such as rent, insurance, utilities, taxes, and waste removal. Some of these expenditures, like waste removal, may be fixed, whereas others, such as your gas bill, may vary.