Total sales revenue for the period (GST-exclusive if GST-registered).
Cost of Goods Sold
$55,000.00
Gross Profit
$65,000.00
Gross Profit Margin
54.2%
Everything you need to know about COGS for your New Zealand business
What is cost of goods sold?
Cost of Goods Sold (COGS) represents the direct costs of producing or purchasing the goods that a business sells during a specific period. It includes the cost of materials, direct labour involved in production, and other direct costs. COGS is a key metric reported on your income statement (profit and loss) filed with the IRD (Inland Revenue Department).
How is COGS calculated?
The basic formula is: Beginning Inventory + Purchases - Ending Inventory = COGS. This method tracks inventory flow to determine how much stock was consumed during the period. In New Zealand, businesses must maintain accurate inventory records for tax purposes.
Why is gross profit margin important?
Gross profit margin shows what percentage of revenue remains after covering the direct costs of goods. A healthy gross profit margin varies by industry but ensures you have enough revenue to cover operating expenses, GST obligations, and generate net profit. Tracking this over time helps identify pricing or cost issues early.
Note: This calculator uses the periodic inventory method. Ensure your figures are GST-exclusive if you are GST-registered. For complex inventory accounting, consult a qualified chartered accountant.
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Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms