how do we calculate net profit for a restaurant business?

Question

i know there are many different ways to get that result but i like to find the latest system

Answer 1

Total all your Revenues.
Total all your Cost Of Goods.
Subtract Cost Of Goods from Revenues.
The result is Gross Profit.

Total all your Operation Expenses.

Subtract those from your Gross Profit.

VIOLA!
NET PROFIT.

Everything you eat or take home is Shortage.
That could be considered as part of Net Profit. EH!

Answer 2

It works pretty much the same way for any business.

Every dollar and cent you took in is totalled to determine your "Gross Income".

Every dollar and cent you spent in order to run the business is totalled to determine your "Business Expenses".

Subtract "Business Expenses" from "Gross Income" to get your "Net Income" figure.

It's important to note that your expenses include the cost of the food you purchased, salaries paid, cleaning services, accounting/bookeeping costs, toothpicks, replacement salt shakers, pens to keep records, etc. In other words, Everything you spent during the year.

The only exception is for items that typically last for more than one year such as a new oven, tables, chairs, etc. Typically, those are "amortized" over the life of the item. In other words, if an item will last for 20 years, you wouldn't count the entire cost as an expense for this year only. You can get help with this from the IRS if you do your own books or any tax service or accountant/bookeeper should know what to do.

Good Luck!