Cost of Goods Sold (COGS)

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Cost of Goods Sold (COGS) refers to the direct costs attributable to the production of goods sold by a company. This includes the cost of materials and labor directly used to create the product. COGS is subtracted from revenues to calculate gross profit and is a crucial metric in assessing a company’s financial performance. Understanding the COGS definition is essential for accurate financial reporting and analysis.

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