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ID: 2775799 • Letter: H
Question
home / study / questions and answers / business / finance / go to http://finance.yahoo.com and get a quote ... Question Go to http://finance.yahoo.com and get a quote for one company of your choice. On the left column, scroll down and select Income Statement. Write down the annual sales and cost of goods sold for the most recent two years. how do you figure out cost of goods sold? Exactly from what number from income or balance sheet? I see the inventory from 2013 and 2014 but what is use to add to purchases and then minus current inventory?
Explanation / Answer
Company chosen: HPQ (Hewlett-Packard).
Annual sales, 2014 = $111,454 million
Annual sales, 2013 = $112,298 million
Cost of goods sold, 2014 = $84,839 million
Cost of goods sold, 2013 = $86,380 million
Cost of Goods sold is calculated using the following equation:
Ending inventory = Beginning inventory + Purchases for the year - Cost of goods sold
So,
Cost of goods sold = Beginning inventory + Purchases for the year - Ending Inventory
The problem encountered in computing COGS using only the beginning & ending inventory data is that, the Purchases expense during the year is generally not disclosed in the Financial statements, and come from the internal cost statements.
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