💼 When you’re running a business, making sales is great — but what matters even more is how much of that revenue actually becomes profit.
Return on Sales (ROS) is a simple but powerful metric that shows how efficiently your company turns revenue into profit. Use the Return on Sales Calculator to find that out.
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To calculate ROS using the calculator below, enter your net sales and operating profit. The tool will also provide a graph to help you visualize the results.
🙋 What Is Return on Sales (ROS)?
Return on Sales tells you what percentage of your sales revenue turns into operating profit. It helps answer the question: “Out of every dollar I earn, how much do I keep as profit after operating costs?”
It’s often used to:
- Measure profitability over time
- Compare performance with competitors
- Set financial goals and track progress
🔢 Return on Sales Formula
The formula is simple:
Return on Sales (ROS) = Operating Profit ÷ Net SalesTo turn it into a percentage, just multiply the result by 100.
For example:
If your business made $100,000 in net sales and $15,000 in operating profit:
ROS = 15,000 ÷ 100,000 = 0.15 or 15%That means you’re earning 15 cents in profit for every dollar in sales.
✅ Why ROS Matters
Return on Sales is a great indicator of financial health and operational efficiency. A higher ROS means:
- You're managing your costs well
- You have strong pricing power
- You're likely to survive economic ups and downs
On the other hand, a low ROS might mean:
- Your costs are too high
- Your pricing is too low
- You need to improve your operations
📊 What’s a Good Return on Sales?
It depends on the industry. Here are some general benchmarks:
- Retail or food industry: 3–5%
- Manufacturing: 5–10%
- Software and digital services: 15–30%
So be sure to compare your ROS with businesses similar to yours.