What Is Cost of Goods Sold (COGS)?

Patrick Curtis

Reviewed by

Patrick Curtis WSO Editorial Board

Expertise:Investment Banking | Private Equity

Cost of Goods Sold (or COGS) is the total cost of sales for the entire output of a company. It is the sum of the cost of each good sold. This is another crucially important financial figure for analysing a company. COGS includes materials, labour, distribution and generally everything incorporated with every individual unit of output. For projection purposes, COGS is either taken as a percentage of revenue or as an actual calculation from unit sales and unit costs. In future projections, Prepaid Expenses, Accounts Payable, Inventory and Accrued Expenses can all be assumed to be a percentage of COGS.

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Patrick Curtisis a member ofWSO Editorial Boardwhich helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis This content was originally created by memberWallStreetOasis.comand has evolved with the help of our mentors.