What is a good return on sales (ROS)?

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To understand what separates the good from the bad, you must also keep in mind that every niche is different. For example, retailers like Walmart, Amazon, and Target work with very thin (small) margins, meaning that their profit margins on sales are very low. However, due to their sheer volume and optimal cost control, their overall profits and revenues are high. Therefore, they are able to sustain their business and show a fair ROS ratio.
But if you're a manufacturer of, say, custom furniture, your margins and upfront costs are much higher, but you don't sell as many units, so you need a very high return on sales to stay profitable and financially stable.
There is no single number that can be considered a "good ROS," but mid-sized and large companies will be satisfied with around 10%. The exceptions are the mega-corporations mentioned above, such as Walmart bosnia and herzegovina telegram database and Amazon, which operate on margins of 2-3%, with an ROS ratio of 0.02-0.03.
Meanwhile, the graph below shows the profit margin on sales in the soft drinks industry.


Source company statement
As we can see, the average ROS is somewhere between 15-25%, which means that if you want to compete in this market, you should measure your business and look for a 0.2 return on sales as a good result. Of course, there are different niches and ideas, so you can put yourself in the category of Monster Energy or similar companies (focusing on higher profit margins, but not so much volume). Overall, I think the term good return on sales is very relative, and you should analyze your competitors to know more about what you are aiming for.

Constant measurement allows you to monitor your financial health
Now we know how to estimate it and how to know if we have a ratio. Good , but it's time to think about what benefits we get from calculating this metric.