What percentage of revenue should COGS be?

What percentage of revenue should COGS be?

The Food Service Warehouse recommends your restaurant cost of goods sold (COGS) shouldn’t be more than 31% of your sales .

What is COGS to revenue ratio?

The COGS to Sales ratio showcases the percentage of sales revenue that is used to pay for the expenses that vary directly with the sales of your business. This ratio indicates the efficiency of your business to keep the direct cost of producing goods or rendering services low while generating sales.

How do you calculate COGS percentage?

Calculate the cost of sales ratio by dividing the cost of sales by the total value of sales. Then multiply the result by 100 to get the percentage.

How much of COGS is labor?

You can determine what’s a good labor to sales ratio and whether or not to decrease labor costs to get there. Labor cost should be around 20 to 35% of gross sales. Cutting labor costs is a balancing act.

What is cost divided by revenue?

In finance, a company’s gross margin is simply the difference between revenue and cost of goods sold (COGS) divided by that revenue figure.