Return on Sales - What is good return on sales?

Q: What is good return on sales?

Most companies are happy to get a 5-10% return on sales. Obviously, if you're unprofitable and losing money, your bottom line is going to be a negative number. So your return on sales will also be a negative number—but if your gross margin is positive, then increasing sales will help the situation.

Answer

An ROI of 5% to 10% is considered satisfactory by the majority of businesses. Your bottom line will unavoidably be negative if you are not making a profit. Increased sales will alleviate the problem if the gross margin is good, but a negative return on sales is also possible.

Return on Sales - What is good return on sales?

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