How to calculate food cost percentage? Why it is important?

Learn how to calculate food cost percentage and why it’s important for restaurant success. Get expert insights and discover how Paperwork can streamline your financial management.
What is Food Cost Percentage?
Food cost percentage is the ratio of food costs to total food sales, expressed as a percentage. It measures the portion of revenue generated from food sales that is consumed by the cost of ingredients and kitchen operations.

For example, if you spend $15 on ingredients for a dish and sell it for $35, your food cost percentage is 40%. This means that 40% of your revenue from that dish goes to cover the cost of food, while the remaining 60% is your gross profit margin.