Essentials of Supply Chain Management, Third Edition by Hugos Michael
Author:Hugos, Michael...
Language: eng
Format: epub
Published: 2014-05-02T05:13:18.468000+00:00
Return on Sales
Return on sales is a broad measure of how well an operation is being run. It measures how well fixed and variable costs are managed and also the gross profit generated on sales:
Return on Sales = Earnings before Interest and Tax / Sales
Again, as a rule, the higher the return on sales the better. There are times though when a company may deliberately reduce this number in order to gain or defend market share or to incur expenses that are necessary to achieve some other business objective.
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