Cost of Goods Sold (COGS)
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Cost of Goods Sold (COGS) = Opening inventory + Purchases − Closing inventory. Gross profit = Revenue − COGS. Gross margin % = Gross profit / Revenue × 100.
- 1COGS = Opening stock + Purchases − Closing stock
- 2Gross profit = Revenue − COGS
- 3Gross margin = Gross profit / Revenue × 100
Revenue £100K, COGS £60K=Gross profit £40K, margin 40%
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