Return on Sales
2 July 2021
Return on Sales (also referred to as net profit margin or net income margin) measures how much profit a company makes for each dollar in revenue. While the net profit will give us the actual amount of money earned, the return on sales gives us a percentage. This in turn provides us with a measure we can now use to compare companies or business units.
Return on Sales is an important indicator measuring how efficient a company (or business unit) is and how well it is able to control its costs.
Return on Sales = (Net Profit / Revenues) x 100
Related Articles
4 Game-Changing Quantum Computer Types That Could Transform Everything
By now, “smart” versions exist of just about every home appliance, gadget and gizmos we can think of. However, manufacturers continue[...]
AI’s Competitive Edge: Turning Data Challenges Into Business Success
By now, “smart” versions exist of just about every home appliance, gadget and gizmos we can think of. However, manufacturers continue[...]
Sign up to Stay in Touch!
Bernard Marr is a world-renowned futurist, influencer and thought leader in the fields of business and technology, with a passion for using technology for the good of humanity.
He is a best-selling author of over 20 books, writes a regular column for Forbes and advises and coaches many of the world’s best-known organisations.
He has a combined following of 4 million people across his social media channels and newsletters and was ranked by LinkedIn as one of the top 5 business influencers in the world.
Bernard’s latest book is ‘Generative AI in Practice’.
Social Media