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What is ROC - Return on Costs
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. It is an additional indicator of the ROS.

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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Last update: 22.08.2016

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