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Finance allah shmoop what is return on sales or r

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o s This is your return This is your return

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on sale Any questions Oh i see a lot of

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hands raised Ok then return on sales are roos is

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an investment metric which basically reflects how profitable a company

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is that is return here is profits and sales is

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well the stuff you sold so return on sales is

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a profitability index It speaks to how profitable and given

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industry or company runs take wear hauser the paper and

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pulp company that kills trees and makes them into paper

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in a good year They have five billion dollars in

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sales and profits of two hundred fifty million Really low

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profit margin business especially when you consider that so many

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years are well not good But the google search biz

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well it's a bunch of servers and algorithm and not

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much else So in a given year on sales of

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twenty billion box it'll have returns of something like fifteen

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billion pretax The basic notion is that you will see

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the term return on a ton of other terms like

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return on capital return on assets return on equity and

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almost always the return that they're referring to There is

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profits or earnings And from that ratio of return on

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whatever in this case return on sales Investors can impute

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a profit margin just a fraction which then derives the

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valuation and or various other metrics Important toe Understanding a 00:01:33.812 --> [endTime] given security investment that's Why we study it

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