How the calculator works
Cost of goods sold uses the inventory method: beginning inventory + purchases − ending inventory. Food cost % divides food COGS by food sales (not total sales), beverage cost % does the same for the bar, and prime cost adds total labor to both COGS and divides by total sales. These are the four ratios a lender or a buyer will ask for first.
How to read the colors
- Green: inside the sourced benchmark range. Yellow: below the range (check your counts: an unusually low food cost often means a missed inventory) or up to 3 points above it. Red: more than 3 points above — pricing, portioning, waste or theft.
- Benchmarks: food cost 28–35% (MarginEdge, 2026); beverage cost 18–24% (Backbar Academy, 2019); labor 34.2–36.5% (National Restaurant Association, 2025); prime cost 60–65% (Restaurant365). A cafe or a bar sits at different points of these ranges; the Toolkit's presets carry segment-specific targets.
Why count inventory
Purchases alone overstate cost in a month you stock up and understate it the month after. Two inventory counts, thirty days apart, are what make the number comparable month to month. Count the same day of the week, at the same time, before deliveries.
Read the guide: How to Calculate Prime Cost for a Restaurant (Formula + Example).