Need a quick calculator of your return on sales? With just your revenue, expenses and sales figures we’ll quickly calculate your ROS so you can evaluate the state of your business.
How do you know if your business is operating in a healthy manner? Want to know if the whole organisation is working effectively? Often people make the mistake of simply looking at gross profit, or gross sales. You must also factor in the costs of running the business. As part of our Marketing Calculators, this Return on Sales calculator will enable you to have a better idea whether or not your company is delivering the results.
What is Return On Sales?
In business and marketing, one uses ROS to evaluate a business’s ability to generate a profit from its sales, and thus its operational efficiency in marketing its product or itself and growing. The ROS is expressed as a percentage and is easily adaptable to any company size (as it is a ratio). Thus it is an extremely useful tool for determining if your business is fulfilling its potential and growing.
What is the ROS formula?
The ROS is the subtraction of the expenses of your business to run it from the revenue your business generates. You then divide that figure by your revenue again giving you a ratio. This can be transformed into a percentage simply by multiplying it by a hundred. The formula for calculating ROS is as follows :
Return on Sales = (Revenue – Expenses) / Revenue * 100
Note that in some spreadsheets or statements “Revenue” will be replaced by “Net Sales”, especially in marketing contexts.
How do I calculate the ROS with the calculator?
Our calculator is simple to use once you have your revenue and expenses on hand.
- Insert the revenue into the first field
- Insert the expenses into the next field
- Press the “calculate” button. The formula applied will obtain your ROS.
For example, if your company is generating 50,000€ in sales, and has expenses of 30,000€, it will have an ROS of 40%.
What is a good ROS percentage?
ROS percentages can vary, but an ROS of 5-10% is a good indicator for your business.
You might also want to combine your ROS with your business growth calculator