The Income/Outcome^® Contextuary

a visual glossary of corporate finance

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We use "business visualization" to graphically simplify complex business concepts (and increase business acumen). To get more information on business visualization, please see "The Company Board" (our business results visualizer) and Income/Outcome (our customizable business simulation).

The following are our generic explanations of common corporate financial terminology. Actual meanings can vary wildly from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"

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Return On Sales (ROS)

Return On Sales (ROS)

Net Income
The Profit left for the owners, after all costs, expenses, interest and taxes have been paid.

Return On Sales (ROS)
Ratio: Net Income as a percentage of Sales

Net Income (or Net Profit) is the Profit left for the owners, after all costs, expenses, interest and taxes have been paid.

Example:
- Sales of 200 less COS (80) less Operating expense (70) less interest expense (20) and income tax (10) leaves Net Income of 20.
- Net Income of 20 divided by Sales of 200 equals Return on Sales of 10%.

Full it flag term list.