Cost of Goods Sold (COGS)

What is Cost of Goods Sold?

Cost of Goods Sold shows the amount of money a company spends to produce or manufacture the goods they sell. This includes the cost of materials, labor, and Depreciation & Amortization. It does not include indirect costs such as sales and staffing.

Why is Cost of Goods Sold important?

Calculating Cost of Goods Sold helps investors evaluate a company’s margins and economies of scale. It shows how much a company spends to produce the product or service they sell.