A measure of the manager's ability to control expenses and increase revenues to improve profitability is:
A) Residual income (RI) divided by level of invested capital.
B) Return on equity (ROE).
C) Return on investment (ROI).
D) Return on sales (ROS).
E) Asset turnover (AT).

Question

Quizplus · Accepted Answer

Return on sales (ROS) measures the amount of profit a company makes for each dollar of sales revenue generated. It is a good measure of a manager's ability to control expenses and increase revenues to improve profitability. A higher ROS indicates better cost control and revenue generation.

A Measure of the Manager's Ability to Control Expenses and Increase