Cost of Goods Sold (COGS) is one of the key metrics used to measure the success of a service-based business. It is a figure that reflects the total cost incurred by the company in providing goods or services over a certain period of time. This cost includes direct expenses such as the cost of labor and materials, as well as indirect costs such as depreciation and taxes. The COGS number helps businesses evaluate the efficiency of their operations, track pricing changes, and provide a basis for budgeting and forecasting. In short, understanding your COGS is essential for running an effective and profitable service-based business.