ROS ratio
WHAT IS IT ?
Return on sales (ROS) is a ratio used to evaluate a company's operational efficiency; ROS is also known as a firm's operating profit margin.
This measure provides insight into how much profit is being produced per dollar of sales. An increasing ROS indicates that a company is growing more efficient, while a decreasing ROS could signal looming financial troubles.
More information is here.
CALCULATION:
EXAMPLE:
The company has revenues of 100,000 Euros and a profit of 20,000 Euros.
ROS = 100,000 / 20,000
ROS = 0.2 = 20%
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