Definition of 'Return On Revenue - ROR'
A measure of a corporation's profitability that compares net income to revenue. Return on revenue is calculated by dividing net income by revenue.
Return on Revenue = Net Income / Revenue
Net income (NI) is calculated by taking revenues and subtracting the costs of conducting business in addition to interest, taxes paid and depreciation.
Revenue is the amount of money that a company receives as a result of performing business activities during a specific period, including discounts and deductions for returned merchandise. Intrinsically, the difference between net income and revenue is expenses, such that an increasing ROR implies less expense for higher net income.
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