Do You Know Your Business's Cost of Goods Sold?

cost of goods sold  Cost of Goods Sold = Beginning Inventory + Inventory Purchases made that year Why is COGS important? The Cost of Goods Sold metric is essential for evaluating and comparing the profitability of different products or lines of business

Cost of Goods Sold = Beginning Inventory + Inventory Purchases made that year Cost of goods sold, or COGS, is the cost to your business to manufacture or buy the products

COGS is sometimes referred to as cost of merchandise sold Some companies that sell a mix of products and services prefer the term 'cost of revenue ' Cost of goods sold is calculated using the formula: starting inventory + purchases