How to Make a Year-End Profit and Loss Statement for a Restaurant

A restaurant is particularly reliant on its profit and loss (P&L) statement to manage costs against sales revenue. The analysis enables the restaurant owner to determine if the business is operating at a profit or a loss and to make adjustments when necessary. To make a P&L statement, a restaurant can use a standard P&L template for restaurants and plug in the relevant financial figures. Many restaurants generate a P&L weekly or monthly to keep an eye on profitability, but the year-end profit and loss statement that analyzes a 12-month period is prepared by financially responsible restaurants as part of the computations needed for federal and state income tax returns for the business.

A restaurant is particularly reliant on its profit and loss (P&L) statement to manage costs against sales revenue. The analysis enables the restaurant owner to determine if the business is operating at a profit or a loss and to make adjustments when necessary. To make a P&L statement, a restaurant can use a standard P&L template for restaurants and plug in the relevant financial figures. Many restaurants generate a P&L weekly or monthly to keep an eye on profitability, but the year-end profit and loss statement that analyzes a 12-month period is prepared by financially responsible restaurants as part of the computations needed for federal and state income tax returns for the business.

Place the total gross sales for the restaurant for the 12 months of the fiscal year in the revenue section of a restaurant profit and loss template. Compute this amount from all sources of revenue, including food and beverage sales, catering, events and merchandising, as applicable. Most restaurants generate transaction receipts for sales. Total daily amounts are recorded by a bookkeeper. Check the restaurant's books to determine the total sales for the time period.

Place the cost of goods sold (COGS) for the products and services that make up the restaurant's sales figure in the revenue section under sales. The COGS includes the wages paid to workers, wholesale cost of the food and drink and any other expense that is used in the direct manufacture of products. In a typical restaurant, receipts for purchases are processed by a bookkeeper who maintains a running account of expenses. Check with the bookkeeper or other person in charge of the restaurant's books for this information.

List the restaurant's business expenses for the year by category in the expenses section of the P&L template. These expenses are the operating costs that are not involved with the manufacture of products. This category includes one-time and recurring costs. Typical expense categories for restaurants include rent, advertising, tableware, insurance, utilities and depreciation.

Subtract COGS and total expenses from sales and place the amount at the bottom of the template on the line that indicates profit or loss. Many templates that use a spreadsheet will make this calculation automatically. This calculation is pretax. A positive number indicates the restaurant operated at a profit for the year. A negative number indicates the restaurant operated at a loss. This physical presentation of revenue against expenses on paper is the restaurant's profit and loss statement.

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About the Author

Terry Masters has been writing for law firms, corporations and nonprofit organizations since 1995. Her online articles specialize in legal, business and finance topics. She holds a Juris Doctor and a Bachelor of Science in business administration with a minor in finance.