COGS Calculator

Work out cost of goods sold from inventory and purchases, plus gross margin and inventory turnover.

Opening inventory	$20,000
Purchases	$50,000
Freight-in and direct costs	$2,000
Closing inventory	$18,000
Revenue (optional, for margin)	$100,000

Opening inventory

Purchases

Freight-in and direct costs

Closing inventory

Revenue (optional, for margin)

Cost of goods sold

$54,000

Gross profit $46,000, gross margin 46%. Inventory turned 2.84 times (about every 128 days).

From inventory to cost of goods sold

Opening inventory$20,000
Purchases+$50,000
Freight in+$2,000
Closing inventory−$18,000
Cost of goods sold$54,000

About the COGS Calculator

Enter opening inventory, purchases, freight-in and other direct costs, closing inventory and, optionally, revenue. The calculator gives cost of goods sold (COGS), and with revenue the gross profit, gross margin and inventory turnover.

COGS is the direct cost of what you sold in a period: what you had at the start, plus what you bought, minus what's left. It excludes overheads such as rent and marketing.

The formula

COGS = opening inventory + purchases + direct costs − closing inventory

Worked example

Opening stock 20,000; purchases 50,000; freight 2,000; closing stock 18,000; revenue 100,000

COGS = 20,000 + 50,000 + 2,000 − 18,000 = 54,000
Gross profit 46,000: a 46% margin
Inventory turned 2.84 times, about every 128 days

Questions people ask

Does COGS include wages?

Direct labour to make products, yes; office and sales wages, no.

What's inventory turnover?

COGS ÷ average inventory: how many times stock sells through in the period.

Why does closing stock matter so much?

Overcounting it lowers COGS and overstates profit, so count carefully at period end.