Simple guidance to demystify your finances

What's inside?

• An Excel spreadsheet template that will help you easily create a profit and loss statement that summarizes the revenue, costs, and expenses your restaurant incurred during a specific period of time

What is a profit and loss statement for restaurants?

A P&L statement, often referred to as an income statement, is a financial statement that summarizes the revenues, costs, and expenses incurred during a specific period of time.

A P&L statement serves two key purposes for restaurant operators:

• To understand net profit or loss

• To identify areas that are contributing to or hurting the business

How do you create a profit and loss statement for a restaurant?

There are several steps involved in creating a profit and loss statement — from choosing a timeframe, to entering Cost of Goods Sold (COGS), to calculating depreciation.

It’s easier to create a restaurant income statement by using a template you can plug your data into and have automatically calculate key data and financial points about your business.

How do you read a restaurant P&L report?

Based on the data you provide, the template will calculate key data and financial points — like percent of sales, gross profit and gross profit and margin, and net profit/loss —  to help you understand your restaurant’s revenues, costs, and expenses incurred during a specific period of time.

To learn more about analyzing a profit and loss statement, follow along with this guide.

Download the Restaurant Profit & Loss Statement Template

Ready to evaluate your restaurant's financial strengths and weaknesses? Download the free P&L and income statement template.

Frequently Asked Questions

Q: What is a restaurant income statement (P&L)?

A: A restaurant profit and loss statement summarizes revenue, cost of goods sold, labor costs, and operating expenses over a period to show whether the business made or lost money.

Q: What line items should a restaurant P&L include?

A: Key line items include food and beverage sales, cost of goods sold, labor costs, occupancy costs, operating expenses, and net profit or loss.

Q: How do I calculate prime cost from an income statement?

A: Prime Cost = Total COGS + Total Labor; the result should typically stay below 60-65% of sales for a healthy restaurant.

Q: What is a good net profit margin for a restaurant?

A: Industry benchmarks often cite average restaurant net profit margins between 3% and 9%, though the exact number depends heavily on your concept, service style, and location. Because factors like food costs and changing labor regulations fluctuate constantly, average margins can vary from month to month.

Q: Why is my restaurant P&L not matching my cash flow?

A: Your Profit & Loss (P&L) statement measures on-paper profitability (revenues minus expenses), whereas your cash flow tracks actual liquidity, or the movement of physical dollars in and out of your bank account. Discrepancies usually happen because major expenditures like inventory stock-ups, equipment purchases, and loan principal payments drain cash immediately but do not hit your P&L as a single one-time expense. 

Q: What format is this income statement template available in?

A: It's available as an editable Excel spreadsheet.

Q: How often should I review my restaurant's P&L?

A: Most operators review their P&L monthly, with a deeper look at quarterly and annual trends.

Q: Can I use this template with Toast's reporting and analytics tools?

A: Yes, many restaurants use this template as a manual starting point and transition to Toast's built-in reporting for real-time P&L tracking.