₹1 crore in sales sounds impressive. But for an F&B business, topline alone tells you very little about what actually happened inside the kitchen. Suppose purchases were ₹35 lakh.
Is that your food cost?
Not necessarily.
Because purchases are not the same as consumption.
Start with the stock
The basic calculation is:
Opening Stock + Purchases − Closing Stock = Consumption
That consumption figure tells you how much inventory the business actually used to generate its sales. And that is where the interesting questions begin.
Was the consumption justified by the revenue generated?
Or is food disappearing somewhere between procurement and the customer’s plate?
Where can the margin disappear?
It could be:
Wastage — ingredients being discarded unnecessarily.
Over-portioning — every plate using slightly more than the recipe requires.
Pilferage — inventory leaving the business without corresponding sales.
Poor recipe costing — menu prices being set without understanding the actual ingredient cost.
Individually, these may look like small leakages.
Across thousands of orders, they can materially change outlet profitability.
Your kitchen has financial data too
F&B profitability isn’t simply about increasing sales. It is about understanding what every rupee of sales consumed. That means connecting procurement, inventory, recipes, portions, wastage and sales—not reviewing each number in isolation. A restaurant can have strong revenue and still have weak margins because its kitchen economics are not under control.
How PGC helps
PGC’s Virtual CFO and financial reengineering solutions help F&B businesses bring sales, food cost, inventory and outlet profitability into one financial view—so promoters can identify leakages and make better operating decisions.
If your restaurant is growing but margins aren’t growing with it, DM PGC to discuss an F&B profitability review.
Because before asking “How do we sell more?”, you should know “What is every sale actually consuming?”
