The Cogs Equation is an equation for evaluating the cost of goods or services sold by a company. It is used to estimate how much money is spent on overhead, materials, and labor costs associated with the production of a particular product. The equation takes into consideration specific costs such as raw materials, manufacturing expenses, transportation fees, and labor costs. By using the Cogs Equation, companies can determine their overall cost of manufacturing in order to better manage their cash flow and profits.