What is COGS Calculator?
Cost of goods sold is the value of the inventory you actually sold in a period. It is not your purchase total: what you bought is either sold or still on the shelf, so COGS = beginning inventory + purchases − ending inventory. That single formula makes gross profit possible — revenue minus COGS — and it is the first line of any credible ecommerce P&L. This calculator also derives inventory turns and days of inventory from the average stock level, which is how you spot cash trapped in slow-moving products. Sellers who track only revenue usually discover the problem when they run out of cash to reorder.
Common Uses for COGS Calculator
- Prepare monthly or quarterly gross profit figures
- Find how much cash is sitting in slow-moving inventory
- Compare inventory efficiency before and after a range change
- Support a loan or investor conversation with real cost figures
- Check whether a discount campaign actually improved turnover
Why COGS beats purchase totals
A month with $42,000 of purchases can have $45,000 of COGS or $25,000, depending on where inventory landed. Reporting purchases as cost makes a stocking-up month look unprofitable and a run-down month look artificially strong — the reason inventory-heavy businesses look volatile until they adopt the formula.
Days of inventory: the cash clock
Days of inventory = 365 ÷ turns. At 2.7 turns that is 135 days: your average unit waits more than four months to sell, and your cash waits with it. Cutting the top three slowest SKUs often frees more cash than any marketing campaign will generate.
Where COGS meets margin
Gross margin = (revenue − COGS) ÷ revenue. Enter revenue above and the calculator computes it, giving you the margin your price list has to defend. If that margin is under 40% for a physical product, check freight-in and duty are included before you reprice.