Return on Sales - Is a higher return on sales better?

Q: Is a higher return on sales better?

A higher return on sales ratio for a company means that the company is performing better because it retains more money as profit. Further, an increasing ROS shows that the company is growing efficiently, while a decreasing trend in the ratio could be an indication of looming financial difficulties.

Answer

When a company's return on sales ratio is high, it indicates that it is doing well since it is keeping more of its earnings. Additionally, a rising ROS indicates efficient growth for the business, but a falling trend in the ratio may portend impending financial troubles.

Return on Sales - Is a higher return on sales better?

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