![]() Tax reporting - COGS is deducted from total revenue to calculate the gross profit, which affects the taxable income of a business.These ratios provide insights into a company’s efficiency, profitability, and liquidity. It’s used in various financial ratios and calculations, such as the gross profit margin and inventory turnover ratio. Financial analysis - COGS is a key metric for financial analysis.This information can be used to optimize production processes, negotiate better deals with suppliers, and streamline operations. ![]()
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