Question

To determine turns from financial data, which quantity should be used for the flow rate?

Answer 1

To determine turns from financial data, cost of goods sold quantity should be used for the flow rate.

What is COGS?

The total sum that your company spent on expenses directly associated with the selling of goods is known as the cost of goods sold. Depending on the nature of your firm, this could also include raw materials, packaging, direct labor involved in making or selling the product, and items bought for resale.

All direct expenses incurred to produce the goods a business sells are included in COGS. The majority of these expenses are the product's variable manufacturing costs, such materials and labor, although others may be fixed expenses, like factory overhead.

The Income Statement's Cost of Goods Sold (COGS) section is crucial in determining your net income. Calculating COGS is a crucial step in assessing a company's profitability, and it can significantly affect your taxable income.

Hence, To determine turns from financial data, cost of goods sold quantity should be used for the flow rate.

To learn more about cost of goods sold refer to:

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