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COST CONTROL: REVENUE, EXPENSE, PROFIT

This guide gives an overview of cost control and includes a link to a YouTube channel that is very helpful for saving money

INTRODUCTION

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!

A QUICK LOOK AT THE RELATIONSHIP

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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.

HOW THIS RELATIONSHIP WORKS

Let’s Look at a Quick Example of How this Relationship Works!

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WHAT ARE THESE EXPENSES YOU SPEAK OF?

ASK THE ASC FOR HELP!

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RELATIONSHIP EXAMPLES

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.

VIDEOS

Let’s check out these videos with a few examples!

Using Excel:

 

By hand: