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What's the best metric to measure your growth?

  • 6 September 2021
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What's the best metric to measure your growth?

 

ROS is best used as a measurement of when to grow. It defines whether or not you are in a good position to spend some more.

Knowing this KPI allows you to strategize, can you stretch a little more or should you cut back?

  • For one, ROS gives you the profit you’re making so you can identify the return you want to reinvest into your company to grow it further.
  • Two, return on sales is a reliable metric to aim to increase as the higher the ratio, the more the profit.
  • Lastly, you can use the metric to get a picture of your company’s year over year performance as it takes into account both your expenses and revenue.

In contrast, revenue isn’t a reliable metric to measure your businesses’ profitability as your expenses and revenue can vary over time.

Head over here for more on Return on Sales.


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