Wow, 54%...that is horrible. You guys count inventory at the end of every months I assume...right?
Another basic formula would be to take the last months inventory (beginning inventory), add all the month's food purchases, then subtract the ending inventory (current inventory) that you just counted (food cost is generally calculated at the end of the month after inventory). You take that number and divide it by the total food sales for the month.
This is a basic, general method. It looks like this...BI=beginning inventory, CI=current inventory, P=purchases, and S=sales
(BI+P)-CI / S = FC%
There are other food costs as well, like plate cost and menu food costs, all under the umbrella of "food cost." Figuring out how much food is costing you, plus how much you should charge for it, is very important as well.
If you know what something costs you, and you know what food cost % you want to run, then you can figure it out very similar to how chef Pete showed you. Something like this:
So, if your ribeye steak costs you, say, 5 dollars to put on a plate, and you know you want to run a 35% food cost on it, then:
5/.35=14.29. So you might charge 15$ for it. (this is just an example using made up numbers).
BUT, there is a lot more to it than that, this is just basic info. Other factors include all the free stuff you give away (bread, amuse bouche, ketchup, butter, etc) and the other stuff on the plate with the steak (potatoes, vegetables, etc). The true way to do it correctly is to figure all this stuff out for all the food you cook and work from that. There are things like q factors, menu mix, and other stuff.
Some things you can charge more for, some things you can't Making money is about utilizing product in creative ways and being smart with your menu. You have to find balance. Maybe your highest priced menu item you are forced to run close to a 40% food cost on...say a lobster of a filet mignon or something. But, you can balance it out by serving a chicken breast at like 15% food cost. The more of a product you use, the less waste you have, the more money you make.
Say you get in whole PSMO's. You pay 80$ for it. You get 10 beautiful, 8oz filets out of it. So, essentially, those 10 steaks cost you 8$ each. You charge 28$ for it, basically a 30% FC. You make the portions absorb the cost of the PSMO, so anything else you use from the tenderloin is essentially going to be "free." If you can get some nice trimmings from the PSMO, trim all the sinew and fat, then small dice it and put beef tartare on the app menu for like 11 bucks. You pay a bit for some aioli, some crostini (made with day old bread natch), a bit of shallot, caper, egg, and EVOO. Your cost is very minimal for the tartare, since you aren't "paying" for the beef.
Obviously, tartare isn't the only thing you could do with PSMO trim, that was just an example. Chickens are another great one...sell the supreme breasts at dinner, fried chicken thighs and drumsticks for lunch, and make stock from the carcass. Stock=soup. I mean, you COULD buy in just chicken breasts, but if you can find outlets for all the trimmings of butchering your own meat, you can save and make a lot of money.
BUT, yeah, at 54% something is wrong. Your menu pricing is out of whack (you don't charge enough), you guys waste and/or throw away a lot of product, you aren't counting inventory correctly and/or aren't calculating your costs right, or someone is stealing from you....a lot.
Or, you work at a country club or something, have no budget, and make the members whatever they want, whenever they want.