After-Tax Return On Sales

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Return On Equity - ROE

    The amount of net income returned as a percentage of shareholders ...
  2. Cash Return On Assets Ratio

    A ratio used to compare a businesses performance among other ...
  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 ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Fundamental Analysis

    Great Expectations: Forecasting Sales Growth

    Predicting sales growth can be something of a black art, unless you ask the right questions.
  2. Markets

    How To Use Price-To-Sales Ratios To Value Stocks

    Take a look at how this effective ratio can be influenced by certain critical factors.
  3. Investing

    Venturing Into Early-Stage Growth Stocks

    Picking these potential winners is all about sizing up risk. We show you how.
  4. Investing

    Doing More With Less: The Sales-Per-Employee Ratio

    If used properly, this ratio can give you insight into a company's productivity and financial health.
  5. Fundamental Analysis

    Is Apple's Stock Over Valued Or Undervalued?

    Despite several drawbacks, the CAPM gives an overview of the level of return that investors should expect for bearing only systematic risk. Applying Apple, we get annual expected return of about ...
  6. Investing

    Is J.C. Penney Fighting An Uphill Battle?

    J.C. Penney's revenue is once again on the ascent, its free cash flow is closing in on positive territory, and its gross margin has rebounded sharply.
  7. Investing

    What Is The Real Picture Of Linn Energy?

    Numbers don't always tell the full story. Take, for example, the long-term chart for LINN Energy which was expected to be down more than 40%.
  8. Investing

    Intel’s Strategy To Gain Shares In The Market

    While Intel's biggest revenue and profit driver is its PC processor division, the company's data center group is probably its most impressive business now.
  9. Fundamental Analysis

    The Best 5 Online Accounting Systems For Small Business

    Running a small business can be difficult, but thanks to these online accounting services, taking care of payroll doesn't have to be.
  10. Investing

    What Has Been Groupon’s Growth Strategy?

    Groupon established a strategy with efforts to become a broader force in the e-commerce world and to expand more strongly into international markets.

You May Also Like

Hot Definitions
  1. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  2. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  3. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  4. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  5. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
  6. Irrevocable Trust

    A trust that can't be modified or terminated without the permission of the beneficiary. The grantor, having transferred assets ...
Trading Center