Some European companies do not report cost of goods sold as a separate expense item. What affect does this have on financial statement analysis?

Question

Quizplus · Accepted Answer

Cost of goods sold is necessary to calculate gross profit, which is an important measure in financial statement analysis. Without this information, it would not be possible to calculate certain ratios and measures that rely on knowing the gross profit. Other expenses such as selling and administrative expenses may also be affected by the omission of cost of goods sold, leading to inaccurate financial statement analysis.

Some European Companies Do Not Report Cost of Goods Sold