Friday Financial Footnotes from Kevin Mclaughlin

As we begin the 2nd half of our fiscal year I wanted to review a couple of Financial terms that you may or not be familiar with
Gross Profit and Food Cost

What is Gross Profit?
Gross profit is the sum difference between 100% and your Food Cost.  If your Food Cost equals 36.5% then your Gross Profit would be 63.5%

What is Food Cost?
Food cost is the sum difference between 100% of revenue and Food consumed.

Combined Food cost and Gross Profit will always be 100% of their respective sum totals as a percentage.

This is a very simple way to determine line item PL percentages which are all based on Revenues being the 100% baseline

For example;  Revenues are $5300 for the week and food consumed is showing $1934.50. 

What is your food cost percentage?
                        Revenues @ $5300 (100%) less food consumed  @ $1934.50 calculating to be 36.5% as your food cost

What is your Gross Profit?

Food Consumed @ $1934.50 subtracted from your Revenues @ $5300 equals your Gross Profit $3365.50 or 63.5%


Kevin J Mclaughlin | Regional Director of Operations