If your business has a lot of variables, like restaurants or grocery stores for example, knowing how to accurately calculate the cost of goods sold (COGS) is absolutely essential. If the COGS is not accurately recorded and analyzed, losses can quickly add up and in some cases, completely devastate your business. Carefully monitoring price changes, inventory, and sales can make the difference between turning a profit and going into debt.
Understanding COGS is pretty straightforward, but figuring out exactly how much you spend, and on what, can be tricky.
Don’t worry — this guide is here to help. Here’s how to calculate COGS:
What you’ll learn: What is the cost of goods sold? What’s included in cost of goods sold Methods of calculating COGS Importance of accurate COGS calculation Examples of COGS for different industries The impact on your financial statements Get a full
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