Food Cost Equation for Restaurants (2026)

The food cost equation is the same math as the food cost formula: (Beginning inventory + Purchases − Ending inventory) ÷ Food sales. People search both phrases; the operating system is identical.

Worked example

Beginning $4,000 + purchases $6,000 − ending $3,500 = $6,500 food used. Food sales $20,000 → 32.5% food cost.

Use it to cut costs

• Track weekly, not only monthly
• Separate beverage if you need kitchen signal
• Pair with portion cards and waste logs

Full walkthrough: food cost formula guide. Also see food cost percentage calculator, worked menu-pricing examples, and cutting restaurant costs / reduce food cost.