A measure of performance that tells a firm whether they are doing as well as their competitors in generating income from sales is called: A. Return on Sales B. Earnings Per Share C. The Current Ratio D. Return on Equity
Question & Answer
Performance measure
1 Answer
Verified archiveThe correct answer is A. Return on Sales.
Return on Sales (ROS) measures a company’s operational efficiency by comparing its net income to its sales revenue. It indicates how well a firm is generating income from its sales relative to competitors. A higher ROS means a firm is managing its sales effectively to generate profit, which can be used to assess competitive performance.
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