DEFINITION of 'AfterTax Return On Sales'
A profitability measure that indicates how well a company uses its sales revenue. To calculate aftertax return on sales, divide the company's aftertax net income by its total sales revenue. The resulting figure, multiplied by 100, will be a percentage; the higher the percentage, the more efficiently the company uses its sales revenue.
BREAKING DOWN 'AfterTax Return On Sales'
Profitability ratios like aftertax return on sales and aftertax return on assets are useful for comparing different companies within the same industry. However, because profitmargin standards can vary widely by industry, it would not make sense to compare the aftertax return on sales of an automobile manufacturer to that of a clothing store. In addition, a single profitability ratio only provides a small piece of the overall picture of a company's financial performance; investors should use a number of ratios to develop an accurate analysis.

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