Restaurant Financial Metrics

03/03/2025 | Cross + Co - Insights |

As a CPA and CFO, understanding key metrics in the restaurant industry is essential for financial health and operational efficiency.  A few crucial metrics:

  1. Prime Cost-  includes the cost of goods sold (COGS) and labor costs. Ratio = (Prime Cost / Total Sales). By monitoring the Prime Cost Ratio restaurants can keep these significant expenses in check, ideally aiming for around 55%. Additionally, keeping an eye on

2. Gross Profit after Prime Costs (GPPC)-  helps in understanding the true profitability after accounting for food and labor.

3. Total Sales Per Head- indicates how efficiently your team is generating revenue.

Tracking these metrics consistently can significantly improve financial decision-making and overall performance in the competitive restaurant industry.

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