ROS (Return on Sales) Ratio

Return on Sales Ratio Calculation

Out put

Return on sales (ROS) ratio formula & calculator may used to find the ratio of operating income or earnings before interest and taxes (EBIT) to total revenue of a company. It's one of the important finance or accounting tool for performance analysis to determine how efficiently the company is cost wise handling its operations. The history of ROS ratio helps the company to adjust its cost wise operations to convert its revenue into more profitable business. A higher return on sales ratio generally indicates that the company is efficiently using its every part of assets to make it more profitable business and provides more dividend on each shares or increased value of share, and a lower ROS ratio indicates that the company is spending more cost on its operations and provides less dividends on each shares of a company. It is often abbreviated as ROS ratio, also known as Operating Profit Margin ratio.

ROS (Return on Sales) Ratio = Operating Income (or) EBIT/Total Revenue