Return on costs, usually the abbreviation ROC is used. It is a term that refers to the ratio of the total costs to the sales of the enterprise. This is an additional indicator of the Return on Sales (ROS).
Calculation:
ROC = 1 - EBIT/ Sales = 1 - ROS
The lower the indicator value, the better the enterprise has a financial result, because for every 1 dollar of sales, the enterprise was able to create it with lower costs.
Use of the ROC indicator in practice: In the business it is used by CFO in financial analysis to analyze ratios.
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