Return On Sales (ROS)
A ratio widely used to evaluate a company's operational efficiency. ROS is also known as a firm's "operating profit margin". It is calculated using this formula:
Investopedia Says:
This measure is helpful to management, providing insight into how much profit is being produced per dollar of sales. As with many ratios, it is best to compare a company's ROS over time to look for trends, and compare it to other companies in the industry. An increasing ROS indicates the company is growing more efficient, while a decreasing ROS could signal looming financial troubles. Related Terms:
Cost Of Acquisition
Net Income - NI
Profit
Profit Margin
Red Flag
Return
Return On Assets - ROA
Return On Equity - ROE
Revenue |