COGS Calculation Formula is an important business term that applies to the analysis of a company’s cost of goods sold. It gives us an insight into how much money a company has spent to create and sell a product. This calculation includes both direct and indirect costs associated with producing and selling the final product or service. By using this formula, businesses can see their gross profit margins and how efficiently they are using their resources. A COGS Calculation Formula is a powerful tool for companies to understand their current costs and develop strategies to reduce expenses and increase profits.