Many independent restaurant owners can't really tell how their restaurant is actually performing even if they receive their financial statements on a regular basis. If a restaurant's Profit & Loss Statement isn't formatted in the "restaurant industry standard" format, its value is usually very limited.

Here are the main categories on a P&L that are consistent with the National Restaurant Association's Uniform System of Accounts for Restaurants (USAR).

Sales:

• Food Sales
• Beverage Sales

Cost of Sales:

• Food Cost (% shown as a % of "Food" Sales)
• Beverage Cost (% shown as a % of "Beverage" Sales)

Labor:

• Management
• Staff
• Employee Benefits

Prime Cost (total of Food, Beverage & Labor)

Other Controllable Expenses: 

• Direct Operating Expenses
• Music & Entertainment
• Marketing
• Utilities
• General & Administrative
• Repairs & Maintenance

Controllable Income

Non-Controllable Expenses:

• Occupancy Costs
• Equipment Leases
• Depreciation & Amortization

Restaurant Operating Income 

• Interest Expense
• Other (Income/Expense)

Net Income

Using this format, an operator is able to immediately see two of the most important numbers on a restaurant P&L, Prime Cost and Controllable Profit. It also makes it easier to compare your key costs and margins to restaurant industry averages and other operations.

Using a P&L format designed specifically for restaurants will greatly enhance your understanding of how your restaurant is actually performing so you know what deserves your time and attention and what doesn't.

Source: RestaurantOwner.com