Calculation standard v0.3 · 15 September 2026

Calculation method

This page defines the arithmetic used by every calculator. The aim is reproducibility: another person should be able to run the same inputs independently and obtain the same result.

Definitions

C — recoverable product cost excluding VAT.
P_g — customer or till price including VAT.
v — VAT rate as a decimal; 20% is 0.20.
P — net sales value after output VAT.
G — cash gross profit: net sales less product cost.
t — target GP as a decimal.

Core gross profit

P = P_g ÷ (1 + v) G = P − C GP % = G ÷ P × 100 Cost % = C ÷ P × 100 Target P_g = C ÷ (1 − t) × (1 + v)

If an entered cost includes recoverable VAT, it is converted to net cost by dividing by one plus its VAT rate. The user remains responsible for choosing the correct VAT treatment.

Draught

Keg volume ml = keg litres × 1,000 Waste volume ml = waste pints × 568, or keg volume ml × waste % Theoretical serves = keg volume ml ÷ serving ml Saleable serves = (keg volume ml − waste volume ml) ÷ serving ml C per serve = keg cost ex VAT ÷ saleable serves

Waste is a user-supplied operational assumption and can be entered as imperial pints or as a percentage of keg volume. Fractions of a serving are retained because the figure represents average economic yield across kegs.

Spirits

Saleable measures = bottle ml × (1 − bottle loss) ÷ measure ml Spirit C per serve = bottle cost ÷ saleable measures Full-serve C = spirit C per serve + mixer cost, when mixer is included

Wine

Saleable glasses = (bottle ml − expected loss ml) ÷ glass ml C per glass = bottle cost ex VAT ÷ saleable glasses

By-the-bottle and by-the-glass GP use their own net selling prices. The by-the-glass bottle result multiplies the unrounded saleable-glass yield by the glass price.

Cocktails and recipes

Line cost = pack cost ÷ pack size × quantity used Cocktail adjusted cost = sum of lines ÷ (1 − loss %) Recipe portion cost = sum of lines × (1 + extra allowance %) ÷ portions

Units must be consistent within each row. The extra recipe allowance and cocktail loss are different treatments and are not applied together.

Supplier cost changes

Cost change % = (new C − old C) ÷ old C × 100 Weekly cash impact = (new C − old C) × weekly units Average monthly impact = weekly impact × 52 ÷ 12

Rounding

All calculations retain the browser's full floating-point value until presentation.
Money is displayed to two decimal places.
Percentages are displayed to one decimal place.
Recommended till prices are rounded up to the nearest 5p so rounding cannot move the result below target.

Reference test cases

£1.35 net cost, £5 gross sale, 20% VAT: net sales £4.1667, cash GP £2.8167, GP 67.6%.
£120 net cost, 50-litre keg, 568 ml serve and 4.4 pints waste: 83.63 saleable serves and approximately £1.4349 cost per serve.
£1.20 to £1.32 unit cost across 200 weekly sales: weekly cash GP reduction £24.00, holding volume constant.

Verification rule: calculation changes should be checked against these reference cases plus zero-rate VAT, included-VAT cost, zero draught waste and boundary-input tests before release.

Deliberate exclusions

These tools do not calculate accounting profit, labour contribution, demand elasticity, stock variance, corporation tax or personal tax. They do not replace product specifications, stock counts, invoices or professional tax advice.