COGS Calculator: Mastering Your Cost of Goods Sold

Understanding your Cost of Goods Sold (COGS) is key for determining your gross profit margin and making informed pricing decisions.

What is COGS?

COGS includes all direct costs linked with producing or purchasing the goods sold by your business. This Usually, includes raw materials, direct labor, and manufacturing overhead.

The COGS Formula

COGS = Beginning Inventory + Purchases - Ending Inventory

Benefits of Tracking COGS

• Accurate Profitability Analysis: Know exactly how much you're making on each sale.
• Tax Deductions: COGS is a deductible business expense.
• Inventory Management: Identify slow-moving items and improve stock levels.

Internal Links

• Use our Inventory Turnover Calculator
• Check out our Profit & Loss Tool