Return on Revenue (ROR)

Return on revenue (ROR) is a profitability ratio that measures the amount of net income a company generates with its revenue. It is calculated by dividing a company's net income by its total revenue.

The ROR ratio is a useful metric for investors and analysts because it provides a quick and easy way to compare the profitability of different companies. A high ROR ratio indicates that a company is generating a lot of profit from its revenue, while a low ROR ratio suggests that the company is not as profitable.

The ROR ratio can be used to compare companies in the same industry, or it can be used to track a company's profitability over time. It is important to note that the ROR ratio is not without its limitations. For example, the ratio does not take into account a company's debt or its capital structure. As a result, the ROR ratio can sometimes be misleading.

Despite its limitations, the ROR ratio is a valuable tool for investors and analysts. It can be used to identify companies that are generating a high return on their revenue, and it can also be used to track a company's profitability over time.

Here are some additional points to consider about the ROR ratio:

• The ROR ratio is often used in conjunction with other profitability ratios, such as the return on equity (ROE) and the profit margin.
• The ROR ratio can be calculated for a single period of time, or it can be calculated over multiple periods of time.
• The ROR ratio is a useful metric for comparing companies of different sizes.
• The ROR ratio can be used to evaluate a company's business strategy.

Overall, the ROR ratio is a valuable tool for investors and analysts. It can be used to identify companies that are generating a high return on their revenue, and it can also be used to track a company's profitability over time.