Vendion
    Analytics++

    Understanding Margin Calculations

    1 min read#16

    Vendion calculates margins automatically based on cost prices.

    Formulas:

    CalculationFormula
    Food Cost %Cost of Goods ÷ Revenue × 100
    Gross Margin %(Revenue − Cost of Goods) ÷ Revenue × 100
    Margin per itemSelling Price − Cost Price
    Margin % per item(Selling Price − Cost Price) ÷ Selling Price × 100

    Requirement: You must fill in cost price per menu item under Menu for margins to be calculated. Items without cost price are shown with a warning icon and excluded from margin calculations.

    Benchmarks:

    • Food Cost below 35% = Green (good)
    • Food Cost 35–40% = Orange (acceptable)
    • Food Cost above 40% = Red (take action)

    Tip: The Menu Engineering page helps you identify exactly which products are dragging down your margin.

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