Glossary · Reading the business
In short
The direct costs to produce the goods a business sells. Buyers care because it directly impacts gross profit and the business's efficiency.
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.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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