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Calculate the return on sales for a business that has net income of $25,000 and sales of $60,000.
Solution:
The return on sales is calculated by dividing the operating profit of a company by its net sales.
As this indicator is always expressed by a percentage, the last step of calculations is obtained by multiplying the fraction by 100%.
Return on sales = (net income/net sales)100%
Given, net income = $25,000
Net sales = $60,000
Return on sales = (25,000/60,000)100
= (25/60)100
= (5/12)100
= 500/12
= 41.667% ≈ 42%
Therefore, the return on sales is 42%.
Calculate the return on sales for a business that has net income of $25,000 and sales of $60,000.
Summary:
The return on sales for a business that has net income of $25,000 and sales of $60,000 is 42%
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