Profit and loss
March 2011. Kindly contributed by Susan Brocklehurst, City College, Norwich.
Search for Susan on www.skillsworkshop.org
This PPT accompanies a separate PDF workbook . Both resources directly
relate, in terms of theory, to the VRQ qualification, the Foundation Diploma
and also ABC Level 1 Catering.
Curriculum links
This PPT, and the accompanying PDF workbook, covers many aspects of Level 1 and Level
2 Functional Mathematics and adult numeracy. Please refer to the download page for this
resource on skillsworkshop.org for detailed curriculum links and related resources.
Gross profit
 Gross profit = sales – cost of sales
 Discuss: what does this formula mean?
 Complete the examples in your workbook.
 Swap with a partner and check each other’s work
Net profit
 Net profit = sales – all costs
 In pairs, write down a list of all other costs that you can
think of in a hotel/restaurant operation
 Feedback to whole class
Costs
Costs can be divided into:
 Cost of sales
 Overheads
 Labour/wages
Overheads
 Discuss in pairs which costs fall under the heading of
overheads – think about bills that come through the
letter box each month.
 Feedback to class
Wages/labour
 Discuss in pairs which costs fall under the heading of
wages/labour – think about all the costs associated with
employing someone.
 Feedback to class
Net profit
Net profit = sales – all costs
 Complete the examples in your workbook.
 Swap with a partner and check each other’s work
% gross profit
 All organisations will work to an agreed % gross profit
 For example, Dunston Hall works to 74%, the George
Hotel to 72%.
 % gross profit = gross profit/selling price x 100%
Using % gross profit to calculate how much
to charge for a dish
If a dish costs £3.20 to produce and % gross profit is 70%
 How much should you charge for this dish?
 How did you work this out?
 Can you show this in a formula?