After-Tax Return On Sales


DEFINITION of 'After-Tax Return On Sales'

A profitability measure that indicates how well a company uses its sales revenue. To calculate after-tax return on sales, divide the company's after-tax 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 'After-Tax Return On Sales'

Profitability ratios like after-tax return on sales and after-tax return on assets are useful for comparing different companies within the same industry. However, because profit-margin standards can vary widely by industry, it would not make sense to compare the after-tax 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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  2. Cash Return On Assets Ratio

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  3. Return On Total Assets - ROTA

    A ratio that measures a company's earnings before interest and ...
  4. Return On Assets - ROA

    An indicator of how profitable a company is relative to its total ...
  5. Return On Sales - ROS

    A ratio widely used to evaluate a company's operational efficiency. ...
  6. Profitability Ratios

    A class of financial metrics that are used to assess a business's ...
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