Samuel Hamonangan, Hanif Hasan, Muhammad Halfi Indra Syahputra

Analyzing Profitability Ratios to Boost Culinary Menu Performance in Hospitality Business Development

Introduction

Analyzing profitability ratios to boost culinary menu performance in hospitality business development. Boost culinary menu performance using profitability ratios (GPM, ROS, ROCE) in hospitality. Findings show efficient operations but high COGS, urging cost control & menu engineering.

Abstract

This study aims to analyze the financial performance of the steak menu at Butcher Steak & Pasta Palembang using three key profitability ratios: Gross Profit Margin (GPM), Return on Sales (ROS), and Return on Capital Employed (ROCE). The method used is descriptive quantitative, with data sourced from sales records and operating costs for the period May to July 2024. This data was strengthened through observation, interviews, documentation, and literature review, thus providing a comprehensive picture of the business's profitability. The results show an average GPM of 43.73%, indicating fairly stable gross profitability. However, this value is still below the industry standard of 75%, mainly due to the high cost of goods sold for key raw materials. This indicates the need for cost control strategies, such as price negotiations with suppliers or innovation in menu engineering to increase gross profit margins. The average ROS was recorded at 43.73%, more than double the industry standard of 20%. This achievement confirms that the restaurant's operations are running efficiently, with effective cost control, resulting in a high net profit from every rupiah of sales. Furthermore, the ROCE ratio averaged 127.57%, significantly exceeding the industry benchmark of 40%. This indicates that the capital used in restaurant operations has been utilized very efficiently and has generated significant returns. Month-to-month performance fluctuations were relatively small, with a slight decline in June and a rebound in July. Overall, this study reveals that while operational efficiency and capital utilization have been excellent, there is still room for improvement in gross profitability. These findings not only provide practical recommendations for restaurant management but also enrich the literature on profitability analysis in the hospitality and culinary sectors.

Review

This study offers a focused analysis of profitability ratios for a specific menu item within a hospitality business, aiming to enhance culinary performance. Employing a descriptive quantitative methodology, the researchers meticulously examined Gross Profit Margin (GPM), Return on Sales (ROS), and Return on Capital Employed (ROCE) using sales and operational cost data, supplemented by qualitative insights. A significant strength of the paper lies in its clear identification of both outstanding performance and areas requiring strategic intervention. The reported average ROS of 43.73% and ROCE of 127.57% far exceed industry benchmarks, strongly indicating exceptional operational efficiency and highly effective capital utilization, which are commendable achievements for the establishment under review. However, the analysis also reveals a critical area for improvement: the Gross Profit Margin (GPM) of 43.73% falls substantially short of the 75% industry standard, primarily attributed to high costs of goods sold for key raw materials. While the study correctly identifies the need for cost control strategies such as price negotiations with suppliers or menu engineering, the abstract leaves some questions about the depth of these proposed solutions. Furthermore, the reliance on a relatively short data period (May to July 2024) and a single case study, while providing specific insights, might limit the generalizability of some findings and the ability to detect long-term trends or seasonal variations. Expanding the data timeframe or including comparative cases could strengthen future research in this area. Overall, this paper provides valuable practical recommendations for Butcher Steak & Pasta Palembang, pinpointing specific levers for enhancing gross profitability despite otherwise stellar operational and capital efficiency. The clear, concise presentation of findings, coupled with actionable suggestions, makes it a useful resource for restaurant management. Beyond its immediate practical utility, the study contributes meaningfully to the existing literature on profitability analysis within the hospitality and culinary sectors by offering a detailed case study that highlights the intricate balance between various financial performance indicators. It underscores that even highly efficient businesses can still find significant gains by targeting specific cost components.

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