Restaurant Profit, Loss, Financial Data
Restaurant Profit and Loss Statement: The Complete Guide for NYC Restaurant Owners
You can run a packed house every night of the week and still lose money. It happens more often than most restaurant owners want to admit — and when it does, the profit and loss statement is usually the first place the answer is hiding.
The average restaurant operates on a net profit margin of just 3–5%. That means for every $100 that walks in the door, you might keep $3 to $5 after everyone and everything gets paid. At margins that thin, the difference between a healthy business and a struggling one often comes down to how closely you’re watching your numbers — and whether you actually know what to do when they start slipping.
This guide will walk you through everything you need to know about your restaurant profit and loss statement: what it is, what goes in it, how to build one, how to read it, and what your numbers should actually look like. Whether you work with a restaurant accountant or manage your books yourself, by the end of this you’ll know exactly what you’re looking at — and what to do about it.
What is a Profit & Loss Statement
A restaurant profit and loss statement — also called a P&L, an income statement, or a restaurant financial statement — is a report that shows your total revenue, your total costs, and whether you came out ahead or behind during a specific period of time.
Think of it as the financial story of your restaurant. Your bank account tells you what’s there. Your P&L tells you why.
This is an important distinction, and one that trips up a lot of operators. A healthy bank balance can mask serious underlying problems — rising food costs, bloated labor, a slow revenue month propped up by a strong one before it. The P&L cuts through all of that and shows you exactly where money came in and where it went out.
A P&L is also different from a cash flow statement, which tracks the actual movement of cash in and out of the business. Your P&L captures revenue when it’s earned and expenses when they’re incurred, even if the cash hasn’t moved yet. Both documents matter, but for day-to-day operational decisions, your P&L is the one you want in front of you.
You can run a P&L for any time period; weekly, monthly, quarterly, or annually. Most well-run restaurants generate a monthly P&L at minimum, with weekly reporting for prime cost tracking. The frequency depends on your volume and how much control you want over your margins.
This restaurant P&L guide will walk you through the essential steps for creating a restaurant P&L report.
Whether you chose to have a restaurant CPA generate your P&L or you use an accounting software to create it yourself, you will have a better understanding of reading and reviewing one.
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Why Your P&L Is the Most Important Financial Tool You Have
The National Restaurant Association consistently reports that roughly 50% of new restaurants don’t make it past year five. The reasons vary, but a common thread in almost every failure is the same: operators didn’t catch the warning signs early enough, or they didn’t understand what those signs meant.
Your P&L is what makes that attention possible. It connects every decision you make on the floor or in the kitchen — scheduling, ordering, menu pricing, portion sizes — to a financial outcome. When you know your numbers, a 2% spike in food cost isn’t just a vague concern. It’s a line item you can trace back to a specific vendor, a specific week, a specific menu item, and fix it before it compounds.
Successful restaurants don’t just generate P&Ls. They review them, question them, and use them to make better decisions next week than they made last week.
“The difference between well managed NYC restaurants and not so well managed restaurants is the level of attention they pay to the numbers.”
Sample restaurant P&L statement
Below is a monthly P&L for a hypothetical full-service restaurant generating $100,000 in monthly revenue with every number filled in.
| Category | Monthly $ | % of Revenue |
|---|---|---|
| Revenue | ||
| Food sales | $72,000 | 72.0% |
| Beverage sales | $28,000 | 28.0% |
| Total revenue | $100,000 | 100.0% |
| Cost of goods sold (COGS) | ||
| Food COGS | $25,200 | 25.2% |
| Beverage COGS | $6,400 | 6.4% |
| Total COGS | $31,600 | 31.6% |
| Gross profit | $68,400 | 68.4% |
| Labor costs | ||
| Front-of-house labor | $19,000 | 19.0% |
| Back-of-house labor | $16,500 | 16.5% |
| Total labor | $35,500 | 35.5% |
| Prime cost (COGS + labor) | $67,100 | 67.1% |
| Operating expenses | ||
| Rent / occupancy | $8,000 | 8.0% |
| Utilities | $3,200 | 3.2% |
| Insurance | $1,100 | 1.1% |
| Marketing | $1,500 | 1.5% |
| Supplies & misc. | $1,800 | 1.8% |
| Credit card fees | $1,200 | 1.2% |
| Total operating expenses | $16,800 | 16.8% |
| Net loss | −$16,200 | −16.2% |
Prime cost of 67.1% exceeds the 65% benchmark. A 2–3% reduction in labor brings prime cost into range and flips the net result to a profit.
Key restaurant P&L benchmarks (2026)
Sources: NRA 2025 Operations Data Abstract · IBISWorld 2025 U.S. Full-Service Restaurant Industry Report
| Metric | Healthy | Watch zone | Red flag |
|---|---|---|---|
| Food COGS | 28–35% | 35–40% | Above 40% |
| Beverage COGS | 18–24% | 24–30% | Above 30% |
| Total labor cost | 25–35% | 35–40% | Above 40% |
| Prime cost | 60–65% | 65–70% | Above 70% |
| Occupancy / rent | 5–10% | 10–12% | Above 12% |
| Gross profit margin | 65–70% | 58–65% | Below 58% |
| Net profit — full-service | 3–5% | 1–3% | Below 1% |
| Net profit — QSR / fast casual | 6–10% | 3–6% | Below 3% |
Sources: NRA 2025 Operations Data Abstract · IBISWorld 2025 U.S. Full-Service Restaurant Industry Report. High-rent markets (NYC, SF, Chicago) may see occupancy above 12% — in those cases, net margin targets must be adjusted accordingly.
What Information Should You Include?
A restaurant specific P&L statement will usually consist of three main components:
- Section 1 of the P&L will include a breakdown of your sales and revenue.
- The next section will list all your cost of goods sold (COGS).
- The last section will include operating expenses, such as the cost of restaurant insurance and occupancy expenditures.
Another thing to mention is that the restaurant labor cost is usually listed as a separate expense between COGS and operating expenses.
To figure out where your largest profits or losses have occurred, get more granular and break down your revenue and costs into smaller, more specific sections. Also, every business is different, so you can customize your P&L to your company’s needs; you don’t have to take a generic restaurant profit and loss example statement as the testament to follow. You can make your statement as simple or elaborate as you want, but remember it will be more helpful to understand your accounts if you provide details of the costs and gains most relevant to your establishment.
Revenue
Revenue is the profits you earn from selling items and goods to your customers. Most restaurants will make their highest profits from their sales of food and beverages, but some chains will have other forms of revenue. Make sure you list each form of income separately on your Profit and Loss statement.
Food & Beverage Sales
In this category, you can break line items down into smaller subset sections under food, beer, wine and coffee. Depending on what kind of food sales, hospitality business you have, one section may be more profitable than others for you.
Costs
Costs Your restaurant’s costs should include any type of expense, such as inventory purchases, insurance costs, and employee paychecks. The three main expenditures you will encounter as a manager include the cost of goods sold, restaurant labor cost and restaurant operating expenses which is usually listed as separate line items on the P&L statement.
More information to include in a Profit & Loss Statement
Cost of Goods Sold
The cost of goods sold (COGS) metric, or sometimes referred to as cost of usage, records the amount of money you spend on food ingredients and beverages that you supply to your customers.
To understand how the COGS works, you must calculate how much you end up spending on inventory to fulfill your sales transactions to your patrons.
Restaurant Labor Costs
The wages and salaries of all your staff, from your head chef to your waiters, will determine your labor costs. This category offers significant cost containment opportunities. Labor costs can be improved with knowledge of a required resource allocation to demand, continuous improvements in productivity – employee, or physical components of the business, e.g., labor saving equipment, optimized floor plans, etc.
Occupancy Expenses
These costs or expenses include the nuts and bolts of running your business, which includes property taxes, utilities, interest, depreciation, rent and waste removal. Keep in mind to carefully review your leasing agreement, because some expenses may vary where others like the waste removal may be a fixed cost. Another thing to be on the lookout for is possible unforeseen expenses like equipment, or even building, repairs that are a necessity to the safety and success of the business.
Prime Cost
The prime cost is the sum of a restaurant’s food, beverage and labor costs. Some restaurant owners will consider this their profitability cost benchmark number on their P&L statement. Because the prime cost bundles the two largest cost categories, it represents a key indicator into whether the company will be profitable in the next reporting period.
Prime cost is also a direct reflection as to how management is controlling food, beverage and labor costs on a daily basis throughout the reporting period. A successful restaurant will keep its prime cost at 65% or lower.
Restaurant Operating Expenses
Operating expenses will include costs on everything from tablecloths to rent. Depending on what type of hospitality business you have, your expenses may vary.
Restaurant Insurance Cost
Insurance is a must have element when running a business which can cost thousands of dollars a year, based on the extent of the risk coverage you want. Your restaurant’s insurance costs may include coverage for worker’s comp, business crimes, general liabilities, loss of income, equipment breakdown or even property damage. It is recommended you shop around from a few vendors to see all your options.
Controllable Expenses
You can think of miscellaneous costs as any daily expense that is necessary to your restaurant’s business such as the restocking of linen uniforms, cleaning supplies, napkins, paper cups, replacing glassware etc. You also can also include advertising here. Some expenses will obviously vary depending on the type of establishment you run. As an example, when comparing a 5-star Manhattan restaurant to a fast food chain, the 5-star restaurant will invest in more fancy chinaware and the fast food chain will purchase more disposable cups.
Other Business Ventures
Merchandise Sales– this could include any items that are sold or function as promotions for your restaurant. Merchandise could include gift cards, t-shirts, mugs or hats. The chain Hooters does a lot of merchandising, sales and promotion.
Catering – this is a great way to reach out to a new neighborhood and introduce people to your cuisine. This could include doing high end special events or private parties, and it could include selling snacks for a fundraiser or local school event. If your restaurant does any catering, make certain to list it as separate income item, on your P&L statement.
Net Profit / Loss
At the end of the P&L statement, you must list your net profit or loss based on your costs and revenue. You calculate your net profit or loss by subtracting both the labor costs and the operating costs from your gross profit. Your revenue needs to be higher than all your combined costs for you to generate a profit.
Remember, your profit and loss statement should include only what is most relevant to your particular culinary business.
Successful businesses use and rely on data to make decisions.
In order to understand how to increase the profitability of your restaurant, you need to first have a clear sense of how your restaurant is currently performing.
-
How much are you spending on labor?
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How much does it cost you to create each of your menu items?
Which menu items are the best and worst sellers?
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After considering your controllable costs like payroll and food costs, is there enough money to cover your overhead costs?
By regularly creating income statements and tracking your prime cost over time, you will start to recognize trends and areas that need more attention so you can make the appropriate adjustments.
Bookkeeping Chef’s software, platform makes it easy to create and read accurate P&L statements.
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