You also have to question the financial #'s presented, how accurate are they? Did you see several years, analyze patterns in sales, costs, other expenses. I doubt books were audited.
Many small operation don't always record all of thier sales, or if you were planning on selling your business wouldn't you want do things to show maximum profit?
I understand that small variety stores have up to 20% right-off in spoilage, some that spoilage I'm sure goes for personal use.