Cost of Goods Sold (COGS)

COGS represents the total cost of merchandise sold during a specific period. It reflects the direct expenses associated with inventory and is a crucial metric for understanding profitability.

COGS Calculation:
📌 Starting Inventory ($ at cost)
➕ Purchases ($ at cost, including freight)
➖ Ending Inventory ($ at cost)
➡ COGS

This formula helps retailers track inventory costs and assess financial health by understanding how much was spent on sold goods.