Restaurant COGS: How to Calculate Cost of Goods Sold
Calculate restaurant COGS from inventory and purchases and connect the monthly number to recipe and menu decisions.
Cost of goods sold measures the value of ingredients and other sale-related goods consumed in a period. It is an accounting total, while recipe food cost explains the products underneath it. A useful review needs both views.
The COGS formula
COGS = opening inventory + purchases - closing inventory. Apply a documented rule for transfers, returns, staff meals, and packaging so the comparison remains consistent.
If opening stock is 8,000, purchases are 22,000, and closing stock is 7,000, COGS is 23,000. Divide by net sales for the period to get the COGS percentage.
Why COGS and recipe food cost differ
COGS uses inventory movement across the whole business. Recipe food cost models the expected ingredients and packaging for a specific product.
Their difference can reveal waste, portion drift, missing invoices, stock errors, substitutions, or an outdated recipe. It does not automatically prove theft or poor kitchen discipline.
From monthly total to action
Compare the period with a consistent baseline, then isolate the largest supplier price, inventory, or sales-mix change.
Use current recipe costs to identify which high-volume products absorb that change. That turns a financial ratio into a purchase, prep, portion, or pricing decision.
Operator checklist
Count opening and closing inventory consistently.
Match purchases to the same dates and locations.
Document transfers, returns, waste, and staff meals.
Connect the total back to current recipes and sales mix.
Sources
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