Return on sales is used to determine

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Return on assets (ROA)
The return on assets ratio represents the efficiency of a company in generating profits using the available resources. It allows to realize the need to expand or reduce the infrastructure of the company, or the number of vehicles for example. This indicator is more rarely used, except in cases of switzerland phone data restructuring or revision of the scale of a company, after having noted that the profits were not enough to keep it in the race. This is often the case of companies that have changed direction mid-way and have kept equipment or vehicles from a former activity, or even become obsolete. These assets, although belonging to the company and already profitable, have a cost that can, for small companies, reduce the profits and therefore the profitability ratio.

Return on sales (ROS)
whether the sale of a product is profitable compared to its operating costs. This indicator will be used to adapt sales or distribution methods in the event of a poor ratio. For example, by focusing more on marketing, or by offering it on a larger scale, or even by adjusting its price or the quality of the materials used to optimize its production costs if its operating costs cannot be modified.

Return on invested capital (ROIC)
A more commonly used indicator in most companies to measure the profitability ratio is the return on invested capital. It is based on the calculation of the return on equity, but by adding all invested capital, which therefore includes debts.

Interest coverage ratio
Of particular interest to banks and lending institutions , this ratio compares the interest charges on a loan, profits before interest deduction, and the company's tax burden. For lending institutions (both banking and private), this indicator provides a precise view of the company's ability to repay the interest on the debt it has incurred.

We can therefore see that calculating a profit margin or a profitability ratio is quite simple and that it always responds to the same principle: comparing the company's profits with the expenses analyzed to calculate a percentage of efficiency or profitability. The percentage obtained allows informed decisions to be made regarding new investments, modifications, restructurings, and is useful to both companies and those who finance them.