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Cash flow vs cost of goods sold

Asked 2 years ago

What's more important for business growth, having a higher cash flow or a lower cost of goods sold? I sell custom furniture (both indoor and outdoor) online for reference. Thanks !

Abeeha Qasmi

Wednesday, February 15, 2023

Cash flow vs. COGS: Both financial metrics are important to your business's success and growth, but they serve different purposes. While a positive cash flow is critical to facilitate the day-to-day operations of your business, a lower cost of goods sold allows you to reinvest the profit in expanding the product line.

It's essential to strike a balance between these two metrics and consider them in relation to other factors like pricing, quality, and customer demand.





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