For owners
Reading a Restaurant P&L: The Basics for Owners and Chefs
A P&L shows where each sales dollar went. Here are the lines that matter most.
By ChefMind AI Team · · 6 min read
A profit and loss statement (P&L) lists sales at the top and subtracts costs until you reach profit. This is general information, not accounting advice.
The main sections
- Sales: food, beverage, other.
- Cost of goods sold (COGS): what you spent on ingredients and drinks sold. See food cost percentage.
- Labor: wages, and related costs.
- Operating expenses: rent, utilities, insurance, supplies, marketing.
- Profit: what is left.
Lines chefs should know
COGS and kitchen labor are the lines the kitchen influences most. Together with other labor they form prime cost.
Check how COGS is calculated
COGS should use beginning inventory, purchases and ending inventory. If inventory is not counted, the number can mislead. See weekly counts.
Percentages
Express lines as a percentage of sales to compare periods. See food cost percentage vs gross profit.
Ask questions
If a line jumps, ask what changed: price, volume, waste, or a posting error.
The short version
- Sales minus COGS, labor and operating costs equals profit.
- Chefs most influence COGS and kitchen labor.
- Count inventory so COGS is trustworthy.
Frequently asked questions
What is a P&L?
A profit and loss statement summarizes sales, costs and profit over a period.
Do I need an accountant to read it?
An accountant helps with accuracy and tax. Understanding the main lines yourself helps you make decisions.
Keep reading
For owners
Prime Cost for Restaurants: What It Is and How to Track It
Prime cost adds your two biggest controllable expenses, cost of goods and labor, into one weekly number. Here is how to calculate it and what to do when it rises.
For owners
The Owner's Weekly Numbers Routine: 30 Minutes That Matter
You do not need a finance degree, just the same few numbers every week.
Food costs
Food Cost Percentage vs Gross Profit: Which Should You Manage?
A 20% food cost can earn less than a 35% food cost. Percentage measures discipline; gross profit in dollars measures contribution. You need both.
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