Enter the value of the beginning inventory, total value of purchases, and the ending inventory value into the calculator to determine the cost of goods sold.

## Cost of Goods Sold Formula

The following equation is used to calculate the total cost of goods sold.

COGS = B + P – E

- Where COGS is the cost of goods sold
- B is the beginning value of inventory
- P is the total value of purchases
- E is the ending inventory value

How to calculate cost of goods sold

**Fist, determine the beginning inventory value**Calculate the total value of your inventory before any goods are sold.

**Next, determine the total value of purchases made**Calculate the total value of the items sold during the time period being analyzed.

**Next, determine the ending inventory value**Calculate the value of your inventory after items have been sold.

**Finally, calculate the COGS**Calculate the cost of goods sold using the formula above and information from steps 1-3.

## FAQ

**What is cost of goods sold?**

The cost of goods sold, also known as the COGS, is the monetary value of the the cost of the items sold during a specific time period.

**Why should you care about COGS?**

Analyzing the COGS can allow businesses to make quick decisions on purchasing additional inventory and adjusting prices.

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