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Q: Restaurant Profit & Loss, how to determine the profit margin? ( No Answer,   1 Comment )
Question  
Subject: Restaurant Profit & Loss, how to determine the profit margin?
Category: Business and Money > Small Businesses
Asked by: tangxiaodidi-ga
List Price: $6.00
Posted: 16 Jun 2005 16:17 PDT
Expires: 16 Jul 2005 16:17 PDT
Question ID: 534019
If a restaurant does $1 million in sales, how much of the is actually
"net profit"? if a restaurant such as cheesecake factory or other
chain restaurant that are public, with sales $10 million, how much of
that is "net profit"? for mom & Pop deli shop that does $30k in sales
a month, how much of that is "net profit"? what is the general rule of
thumb in determining profit margin/bottom line in the restaurant
industry? and if possible please provide real business examples to
back up the claim i.e., popular restaurants which  the public is
aware?
Answer  
There is no answer at this time.

Comments  
Subject: Re: Restaurant Profit & Loss, how to determine the profit margin?
From: denngy-ga on 28 Jun 2005 16:18 PDT
 
"net profit(loss)" is the result from subtracting the total cost of
sales(including everthing) from the total value of sales.

A restaurant with $1,000,000 in sales must have costs lower then that
to have a net profit.

In determining the value of a business, the key ratio is sales to
costs. Sellers often attempt to conceal some costs or pad the sales so
due diligence includes careful audits of balance statements.

Most restaurants are just jobs with enough income over expense to
provide a modest livlihood to an owner/operator, in my opinion.

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