Understanding how to calculate COGS sits at the heart of basic accounting and sales practices.Īs a case in point, cost of goods sold is often featured in the second line of a business’s income statement or profit and loss statement. What is the cost of goods sold? How do you calculate cost of goods sold? Simply, the cost of goods sold (COGS) is a core calculation in the buying and selling of goods by a small business, distributer, wholesaler, or manufacturer and we’ll show you how to calculate COGS.
