Enter the operating profit and the net sales into the ROS calculator. The return on sales calculator will display the ROS in terms of percentage.
Return on Sales Formula
The following formula can be used to calculate the percent return on sales.
ROS = OP / NS *100
- Where ROS is the return on sales percent
- OP is the operating profit
- NS is the net sales
In this case, the net sales is another way of saying net revenue.
How to calculate ROS (return on sales)
- First, calculate the operating profit
To calculate the operating profit, sum together all costs associated with a good or service.
- Second, determine the net sales
The net sales, also known as the net revenue, is equal to the total goods sold times their price.
- Finally, calculate the ROS
Simply enter the values into the formula above to calculate the percent ROS.
FAQ
ROS is short for return on sales. This is a ratio that represents the total net sales with respect to the operating cost. It’s a business metric used to determine profitability.
If you take a deeper look at the ROS formula, their are only two was to improve ROS; decrease operating expenses, or increase sales. How a company goes about those two things is an entire subject in it’s own.
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