Return on sales ratio
Return on sales ratio (or, simply, return on sales) is a profitability ratio that shows the relationship of net income before taxes to net sales and thereby the effectiveness of a company's pricing policy.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Return on sales ratio. A profitability ratio that shows the relationship of net income before taxes to net sales and thereby the effectiveness of a company's pricing policy.
According to Managerial Accounting by Braun, Tietz (5th edition),
- Return on sales. Ratio of net income to net sales. It is a measure of profitability; also called rate of return on net sales.
Related concepts
- Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. Accountancy tends to include bookkeeping and, depending on a particilar enterprise, may also include quatitative analysis of financial data in the bookkeeping system and/or business intelligence.
