Accounting Cogs Formula is a key concept used by business professionals to measure the profitability of a company or organization. The formula is based on the principle of matching revenues and expenses. To calculate the profitability of an organization, you need to subtract total expenses (including any non-operating expenses such as taxes) from total revenue. This gives you the organization’s gross income, which can then be divided by total expenses to determine the Cogs (Cost of Goods Sold). From there, you can easily calculate Operating Profit Margin and other important metrics related to a business’s overall financial health. By taking into account all sources of income and expenses, businesses can make more informed decisions about their operations.