How do you calculate cost of goods sold? COGS = beginning inventory costs cost of purchased inventory – ending inventory is the formula you use to calculate the cost of goods sold. After that, use the ...

On the income statement, cost of goods sold appears after sales revenue but before gross profit. Revenues less expenses equals net income is the basic formula for an income statement. Gross profit is ...

From there, most of the items listed on the income statement relate to expenses, such as the cost of goods sold—namely expenses for materials—tied to the production and sale of goods and services.