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Finance: What is Return on Sales (ROS)? 3 Views
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Description:
Return on sales is an investment metric that reflects the profitability of a company.
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Transcript
- 00:00
Finance allah shmoop what is return on sales or r
- 00:07
o s This is your return This is your return
- 00:11
on sale Any questions Oh i see a lot of
- 00:14
hands raised Ok then return on sales are roos is
- 00:18
an investment metric which basically reflects how profitable a company
Full Transcript
- 00:23
is that is return here is profits and sales is
- 00:28
well the stuff you sold so return on sales is
- 00:30
a profitability index It speaks to how profitable and given
- 00:35
industry or company runs take wear hauser the paper and
- 00:39
pulp company that kills trees and makes them into paper
- 00:42
in a good year They have five billion dollars in
- 00:44
sales and profits of two hundred fifty million Really low
- 00:48
profit margin business especially when you consider that so many
- 00:52
years are well not good But the google search biz
- 00:55
well it's a bunch of servers and algorithm and not
- 00:58
much else So in a given year on sales of
- 01:00
twenty billion box it'll have returns of something like fifteen
- 01:04
billion pretax The basic notion is that you will see
- 01:08
the term return on a ton of other terms like
- 01:11
return on capital return on assets return on equity and
- 01:14
almost always the return that they're referring to There is
- 01:18
profits or earnings And from that ratio of return on
- 01:22
whatever in this case return on sales Investors can impute
- 01:26
a profit margin just a fraction which then derives the
- 01:29
valuation and or various other metrics Important toe Understanding a 00:01:33.812 --> [endTime] given security investment that's Why we study it
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