The Relationship Between Revenue, Expense, and Profit!
This guide explains one of the most important, yet simple formulas/equations used in cost control.
Revenue - Expense = Profit.
In cost control, the data collected about profits and losses is vital for any restaurant to succeed. As a manager, a person will need to make adjustments and set goals using this formula. If you still need extra help, contact the ASC to schedule an appointment!
As we can see above, if we subtract our costs from our revenue, then this will give us our profit. In addition, increasing revenue, decreasing costs, or both will increase our profit.
Need Academic Help? Contact the Academic Success Center (ASC)!
What is Revenue? What is an Expense? What if I have a Desired Profit?
There are 2 other ways to read this relationship:
In the last relationship, management can determine what an expense should be to hit a certain profit goal.
Let’s check out these videos with a few examples!