Cost of Goods Sold (COGS) as a Percentage of Revenue

Cost of Goods Sold (COGS) as a Percentage of Revenue

KPI Details

Cost of Goods Sold (COGS) as a Percentage of Revenue measures the direct cost attributed to the production of products sold (i.e., materials and labor) relative to the total revenue generated by the company over the same period of time. A high value for this metric can be indicative of inefficient procurement and/or production/manufacturing processes. Such inefficiencies can drive COGS to unmanageable levels, prevent customers from buying such expensive merchandise and expose the company to financial risks by preventing the company from paying its liabilities on time.

KPI Definition

The cost of goods sold (COGS) to customers divided by total dollar amount of sales generated over the same period of time. COGS typically includes material costs, production/manufacturing costs (i.e., labor costs), and the cost of carrying the inventory before it is sold.

KPI Calculation Instructions Cost of Goods Sold (COGS) as a Percentage of Revenue?

KPI Formula :