P&L
Model your monthly income and expense report. Separate controllable and fixed costs, then track net profit.
P&L Statement
P&L Benchmark
What is P&L?
Profit & Loss is the financial statement that shows how much a restaurant earns and spends during a period. It should be prepared every month.
P&L Structure
Total revenue
− COGS (food + packaging)
= Operating profit
− Controllable expenses
= Controllable profit
− Fixed expenses
= Net profit
Understand P&L Deeply
Know the logic behind the numbers and take control.
Controllable vs fixed
Controllable
Food, labor, ads, promos, utilities, and repairs can be changed. A large share of P&L control is in your hands.
Less controllable
Rent, tax, insurance, and depreciation are more fixed. Focus first on expenses you can influence.
What is Prime Cost?
The two largest restaurant costs are food and labor. Prime Cost is the most critical P&L metric. Keep it below 65% of sales.
Formula
Food Cost + Labor Cost
= Prime Cost
Prime Cost % = (FC + LC) ÷ Sales × 100
Warning signs
Prime cost above 70% means the restaurant is near the loss zone.
Net profit below 5% is risky; one mistake can turn the month negative.
Rent above 12% may mean the location is too expensive.
Net profit above 15% signals strong performance and room to invest.
DK Agency advice
A restaurant that prepares P&L once a month is already ahead of most competitors. Real power comes from weekly tracking because trends appear earlier.
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