Cost of Goods Sold (COGS)

Beginner 💰 Finance / Accounting

Definition

The direct costs of producing your products—basically the stuff that physically goes into making what you sell.

Example Usage

Our COGS is 40% of revenue, leaving a gross margin of 60%.

Origin

Fundamental accounting categorization

Fun Fact

What counts as COGS vs. operating expense is hotly debated and dramatically affects profitability

Source: Standard income statement classification

Related Terms

Beginner

profit

The magical number left over after you subtract all expenses from revenue, assuming your accounting department is feeling generous about what counts as an expense. It's what companies supposedly exist to generate, though many startups operate for years as if this is merely optional. Shareholders love it, the IRS wants to tax it, and CFOs have seventeen different ways to calculate it.

💰 Finance / Accounting
Intermediate

trial balance

A report listing all general ledger accounts with their debit or credit balances to verify that total debits equal total credits. When they don't match, accountants enter panic mode because double-entry bookkeeping isn't supposed to be optional.

💰 Finance / Accounting
Beginner

grant

Money given to organizations or individuals, usually with more strings attached than a marionette convention and enough paperwork to deforest a small nation. Unlike loans, grants don't require repayment—just your soul, quarterly reports, and the ability to justify every pencil purchase. In the nonprofit and academic worlds, securing grants is essentially a full-time job that determines whether your actual job continues to exist.

💰 Finance / Accounting
Beginner

working capital

Current assets minus current liabilities—the money available to fund daily operations without selling the furniture. Positive working capital means you can pay your bills; negative means start selling that furniture.

💰 Finance / Accounting
Advanced

Piercing the Corporate Veil

When courts hold shareholders personally liable for corporate debts by ignoring the legal separation between company and owners. It's what happens when you treat your LLC like a personal piggy bank.

💰 Finance / Accounting
Advanced

arb

Wall Street shorthand for arbitrage, the art of buying low in one market and selling high in another while everyone else is too slow to notice the price difference. It's basically legal financial alchemy practiced by traders who've figured out how to profit from inefficiencies before algorithms do it faster. The dream job for people who think finding a quarter on the sidewalk is exciting, except scaled up to millions of dollars and requiring a Bloomberg terminal.

💰 Finance / Accounting

Translate This Term

See “Cost of Goods Sold (COGS)” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

Try the Translator

Share This Term

Post on XShare on FacebookShare on LinkedIn

Discover a Term

Intermediate

harshing my mellow

The act of ruining someone's perfectly good vibe, usually uttered by someone channeling their inner 1970s stoner. It's w...