Work out cost of goods sold instantly with clear inputs, formula shown and shareable results.
COGS is derived from the inventory identity: what you started with, plus what you bought or made, less what is still on the shelf. Because the closing figure feeds straight into gross profit, an inventory count error moves reported profit one-for-one.
Cost of goods sold
COGS = Opening inventory + Purchases - Closing inventory
Inventory turnover
Turnover = COGS / Average inventory
Goods bought for resale plus direct materials, inbound freight, duty and direct production labour. Selling and admin costs do not.
It converts the same numbers into a working-capital view: how many times a year you sell through your average stockholding.