Calculating your cost of goods sold is straightforward once you know the Cost of Goods Sold formula and what each input means. This guide explains the method in plain language, walks through a manual calculation, and gives worked examples you can follow — then you can do it instantly with the Cost of Goods Sold Calculator.
What is Cost of Goods Sold?
The Cost of Goods Sold calculation tells you your cost of goods sold from a few simple inputs. The figure you are solving for here is the cost of goods sold, expressed in INR.
The Cost of Goods Sold formula
The core formula is:
Cost of goods sold = Opening inventory + Purchases during period - Closing inventoryHere is what each input means:
- Opening inventory — a money amount. Example: ₹5,00,000.
- Purchases during period — a money amount. Example: ₹30,00,000.
- Closing inventory — a money amount. Example: ₹8,00,000.
How to calculate it step by step
- Write down the opening inventory (for example, ₹5,00,000).
- Write down the purchases during period (for example, ₹30,00,000).
- Write down the closing inventory (for example, ₹8,00,000).
- Apply the formula above to get your cost of goods sold.
- Double-check the result with the Cost of Goods Sold Calculator.
Worked examples
Example 1
| Input / Output | Value |
|---|---|
| Opening inventory | ₹5,00,000 |
| Purchases during period | ₹30,00,000 |
| Closing inventory | ₹8,00,000 |
| Cost of goods sold | ₹27,00,000 |
| Goods available for sale | ₹35,00,000 |
With opening inventory of ₹5,00,000, purchases during period of ₹30,00,000 and closing inventory of ₹8,00,000, the cost of goods sold works out to ₹27,00,000.
Example 2
With opening inventory of ₹10,00,000, purchases during period of ₹30,00,000 and closing inventory of ₹8,00,000, the cost of goods sold works out to ₹32,00,000.
| Result | Value |
|---|---|
| Cost of goods sold | ₹32,00,000 |
| Goods available for sale | ₹40,00,000 |
Example 3
With opening inventory of ₹2,50,000, purchases during period of ₹30,00,000 and closing inventory of ₹8,00,000, the cost of goods sold works out to ₹24,50,000.
| Result | Value |
|---|---|
| Cost of goods sold | ₹24,50,000 |
| Goods available for sale | ₹32,50,000 |
Tips for an accurate result
- Keep your units consistent — mixing, say, months with years or grams with kilograms is the most common source of error.
- Round only at the very end. Rounding inputs early can shift the final answer noticeably.
- Re-run the numbers whenever an input changes, rather than estimating from an old result.
Prefer not to do the maths by hand? — the Cost of Goods Sold Calculator does it instantly, for free, with the formula and a worked example built in.
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