How do I calculate true COGS on an income statement?
Asked 2 years ago
I want to know the actual cost of my business operations to determine an adequate profit margin and adjust my product prices accordingly. When I worked out the COGS of my Shopify store, the final figure did not line up. Is there a way I can determine the correct figure using the financial report and find where my calculation went wrong?
Conor Valenzuela
Monday, August 08, 2022
The income statement formula is gross profit + income - expenses. To get the gross profit you'll subtract revenue from the COGS. If you have an income statement then you have the COGS already calculated, however, some income statements start with the gross profit value without indicating how it was calculated. If that's so you can get the COGS by subtracting revenue from the gross profit.
Jolina Regin
Wednesday, September 07, 2022
Most income statements already have the COGS calculated. It starts with revenue then COGS. It is subtracted from revenue to get the gross profit. While other income statements will start with the gross profit. To get the COGS you'll find the total sales and then use this formula:
Sales - Gross profit = COGS
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