CMV: learn how to calculate the most important metric for your delivery

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Cost of Goods Sold (COGS) is the metric that maintains the financial health of any business in the food and beverage industry.

It is an indicator that offers a good understanding of the operations and financial performance of a restaurant and delivery service.

The CMV exists precisely to find your gross profit, that is, what you spent and what you received in a given commercial transaction. Therefore, it is an essential tool for restaurant and delivery owners and managers.

Do you already know what and how to use and how to calculate the CMV in your delivery?

If you still have doubts and insecurities regarding the CMV metric, continue reading this article and learn how to calculate CMV, the most important metric for your delivery!

Index
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Name
Name
Enterprise
Enterprise
E-mail
E-mail
Telephone
Telephone
Monthly billing

I don't know
Number of orders per day

I have no orders yet
What is CMV?
Centralize and automate your delivery service, managing all your orders with Cardápio Web
How to calculate the CMV in your delivery?
How to reduce CMV?
Negotiation with suppliers
Reduce the number of items on the menu
Change prices that are inappropriate
Carry out strict waste control
Conclusion
What is CMV?


CMV is the sum of the costs of producing and storing goods for your delivery service. You can calculate the CMV of each item on your menu by adding up the cost of all the ingredients needed to make the dish.

The purpose of CMV is to calculate gross profit, representing the expenses and revenues involved in a sale. In other words, the lower the CMV, the higher your profit will be.

The ideal recommended CMV for restaurants is between 25% and 35%.

See what data we can collect from CMV:

Strategic pricing
COGS provides a basis for properly pricing the dishes offered on the menu. By calculating the cost of the ingredients and other resources used in each item, it is possible to determine prices that cover the costs.

Price adjustments
Understanding COGS allows you to make adjustments to product prices as needed. If ingredient costs increase, for example, COGS can indicate the need to increase dish prices to maintain healthy profit margins.

Profit evaluation of menu items
By examining the individual COGS of each menu item, we can identify which dishes are contributing positively to profits and which are generating losses.

Protecting the financial health of the business
Ignoring the calculation of CMV can have consequences for the financial health of a business. Poorly managed costs can quickly lead to reduced profit margins or even losses, jeopardizing the financial viability of the business and ultimately leading to bankruptcy.

Cost of Goods Sold and efficient inventory management must work together for any business in the food and beverage industry. When combined, they provide a basis for optimizing costs and having a profitable business.

For example, by keeping track of inventory and analyzing CMV, it is possible to identify opportunities to reduce waste, adjust replenishment orders accurately, and avoid unnecessary expense or food waste.

How to calculate the CMV in your delivery?


There are two ways to obtain or calculate the CMV, check it out:

Firstly, to obtain the value of your CMV, you will need to start from the sum of the initial stock (EI) with the purchases of the month, or of the period you determined (C), minus the inventory or final stock (EF).

This way, we will arrive at the following formula:

CMV = EI + C – EF

Let's look at a practical example:

Assuming that, at the beginning of the month, your company had R$10,000 in inventory (EI)
Over the course of 30 days, R$5,000 in purchases were made
At the end of the period, the company ends up with R$4 thousand in stock (EF).
Therefore, we have the calculation:
CMV = EI + C – EF

COGS = R$10,000.00 + R$5,000.00 – R$4,000.00

CMV = R$11,000.00

This calculation gives you the overall CMV of the business. This way, you can have a broad view of how much it cost to store the merchandise until it was actually sold.

To get your gross profit, you must deduct the CMV from the total sales in the selected period, so we will use the following formula:

GROSS PROFIT = SALES – COGS

In this example, if you had total sales of R$25,000.00 this month, your gross profit was R$14,000.00.

You can follow the same calculation to obtain the CMV by product categories (e.g. beverages) or the unit CMV of a given item (e.g. soft drink).

To do this, we will need to find the EI of each group, identify how much was invested in purchases and also the EF of each one.

Therefore, assuming you want to find the CMV of the water sold in your establishment:

We will start with R$100.00 of initial stock (EI) in water.
After 30 days, we found that water purchases totaled R$300.00 (C).
At the end of the period that was determined, we arrived with R$150.00 in stock (EF).
CMV = EI + C – EF

COGS = R$ 100.00 + R$ 300.00 – R$ 150.00

CMV = R$ 250.00

This means that our water CMV was R$250.00.
In this example, if you sold R$450.00 worth of water in those 30 days, your gross profit was R$200.00 from that product.

The second way to calculate your CMV is to consider the cost of each item on your menu. Therefore, to obtain the CMV, you will need to list all the ingredients needed to produce each dish available on your menu, with quantity and cost, which is obtained from the technical sheet .

First, let's add up the ingredient costs to get the total cost of each dish. Let's take an example of a pepperoni pizza:

350 grams of flour = R$ 0.77

200 grams of tomato sauce = R$ 0.16

250 grams of mozzarella = R$5.00

50 grams of tomatoes = R$ 0.20

150 grams of pepperoni = R$2.70

2 Eggs = R$ 0.66

Total cost of pepperoni pizza = R$9.49

The second step to calculate CMV is to divide the total cost by the sales price and multiply it by 100. Obtaining the following formula:

CMV = (TOTAL COST / SELLING PRICE) * 100

Assuming that the pizza above is sold for R$35.00, we have that the CMV would be:

COGS = 9.49 / 35 * 100 = 27.11%

This way, we can get the CMV of each dish and understand whether we have a good profit margin from the sale. As mentioned, the ideal CMV of each product should be around a maximum of 35% of the value of the final product.

Therefore, in the event of increases in the price of ingredients, we will be able to calculate the new sales price to maintain our healthy profit margin.

It is important to remember the common expenses that do not fit into the CMV metric:

Taxes on revenue, such as PIS/Cofins, IRPJ and ICMS;
Administrative expenses, such as fixed costs for telephone, internet and rent;
Operating expenses, such as freight;
Financial expenses, such as interest on loans;
Sales expenses, such as commissions.
If you still have questions, check out the video below and learn all about the metric and how to calculate CMV: