profit-to-sales ratioa measure of a firm's PROFIT MARGINS, which expresses the firm's PROFITS as a percentage of its SALES REVENUE. Competitive pressure on selling prices or cost increases serve to squeeze profit margins and affect profits. The profit-margins ratio has a significant impact upon a firm's RETURN ON CAPITAL EMPLOYED.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson