The margin of profit is a financial metric that reveals the relationship between gross profits and net sales. It is used to evaluate a company's profitability by expressing gross profit as a percentage of net sales.
Net Sales refers to the revenue that remains after deducting returns and allowances, freight out, and cash discounts allowed from the gross sales.
Return on Sales (ROS) is a key financial performance metric that calculates net pre-tax profits as a percentage of net sales, serving as a useful measure of overall operational efficiency compared with prior periods or other companies.
