Calculating the Cost Ratio for Restaurants
Let’s calculate your restaurant’s cost ratio.
Cost Ratio = Cost ÷ Sales
*Cost = Purchase Price of Ingredients × Amount of Ingredients Used (how much was used)
*Cost = Purchase Price of Ingredients × Amount of Ingredients Used (how much was used)
| Cost Ratio | % |
How low you can keep your cost ratio has a major impact on your final profit.
Main Factors Contributing to a Higher Cost Ratio
・Portion overage (using more ingredients than specified)
・Food waste (losses resulting from failure to follow inventory management and the first-in, first-out principle)
・Increase in the proportion of orders for high-cost-ratio menu items
・Rise in ingredient purchase prices
Main Factors Contributing to a Higher Cost Ratio
・Portion overage (using more ingredients than specified)
・Food waste (losses resulting from failure to follow inventory management and the first-in, first-out principle)
・Increase in the proportion of orders for high-cost-ratio menu items
・Rise in ingredient purchase prices
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