{"ok":true,"canonical_url":"https://dealroom.so/glossary/cogs","api_url":"https://dealroom.so/api/public/glossary/cogs","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"cogs","term":"COGS","group":"Reading the business","definition":"The direct costs to produce the goods a business sells. Buyers care because it directly impacts gross profit and the business's efficiency.","what_it_means":"COGS includes material costs, direct labor, and manufacturing overhead. When evaluating a target business, you'll scrutinize COGS on the Profit and Loss Statement to understand true profitability before operating expenses. High COGS relative to revenue can signal inefficiency or pricing issues.","url":"https://dealroom.so/glossary/cogs","official_sources":[],"related":[{"slug":"profit-and-loss-statement","term":"Profit and Loss Statement","url":"https://dealroom.so/glossary/profit-and-loss-statement"},{"slug":"ebitda","term":"EBITDA","url":"https://dealroom.so/glossary/ebitda"},{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"},{"slug":"add-backs","term":"Add-backs","url":"https://dealroom.so/glossary/add-backs"}],"related_questions":[]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — COGS","url":"https://dealroom.so/glossary/cogs","source_type":"DealRoom Data"}}