Definition
Return on Sales (ROS) is the measure of net profit as a percentage of sales revenue. It is an indicator of profitability that is often used to compare the profitability of companies and industries of differing sizes.
ROS does not account for the capital (investment) used to generate the profit.
Return on Sales (%) = Net Profit ($)/Sales Revenue ($)
References
- Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; and David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance (Second Edition). Upper Saddle River, New Jersey: Pearson Education, Inc.