# Financial Calculators

Return on Sales (ROS) Calculator is a financial metric that measures a company's efficiency in generating profits from its sales. It's calculated by dividing net income by net sales, and is commonly expressed as a percentage. It takes net income and net sales as inputs and calculates the ROS.
Q: What is the Return on Sales (ROS) calculator used for?
A: The Return on Sales (ROS) calculator is a tool designed to calculate a company's profitability and efficiency. It measures the net profit a company generates from its sales revenue after deducting all costs and taxes.

Q: How is Return on Sales (ROS) calculated?
A: The ROS is calculated by dividing a company's operating profit by net sales and then multiplying the obtained fraction by 100%.
ROS = Operating Profit / Net Sales × 100%

Q: What does the Return on Sales (ROS) percentage indicate?
A: The ROS percentage indicates what percentage of each dollar of sales is actual profit. For example, if a company retains \$0.17 out of each dollar of sales, its ROS is 17%.

Q: Why is Return on Sales (ROS) beneficial for companies?
A: Return on Sales is useful for comparing a company's profitability between different periods. An increasing ROS indicates efficient growth and improved financial condition, while a decreasing ROS may suggest challenges in converting revenue into profit.

Q: What are some other business indicators related to ROS that one might be interested in?