profit-margins ratio

(redirected from profit-to-sales ratio)

profit-margins ratio

or

profit-to-sales ratio

a 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.