Understanding how to calculate the Cost of Goods Sold (COGS) is essential for any business owner. COGS represents the direct costs tied to producing goods that a company sells during a specific time.

Cost of goods sold is listed below sales revenue and before gross profit on most income statements. Expenses (including COGS) can be subtracted from revenues to calculate net income. A company's cost ...

Operating margin is a profitability ratio that measures a company’s operating efficiency after cost of goods sold and operating expenses have been deducted from revenue. Operating income is ...