Return on sales is calculated by dividing
A) sales by cost of goods sold.
B) gross profit by net sales.
C) net income by stockholders' equity.
D) net income by sales.

Question

Quizplus · Accepted Answer

Return on sales (ROS) is also known as operating margin or profit margin. It measures the net income (profit) earned as a percentage of sales revenue. Therefore, ROS is calculated by dividing net income by sales. Option A is the formula to calculate gross profit margin, while option B is reverse ROS. Option C is the formula to calculate return on equity (ROE).

Return on Sales Is Calculated by Dividing