Return on costs (ROC)

Return on costs (ROC) is one of profitability indicators. It expresses the amount of profit attributable to unit total cost.

Calculation formula

Comparison

• it is particularly suitable for comparison within the company - especially as an indicator of changes in costs over time as reduction of the ratio can indicate rising costs, and vice versa

• comparisons between companies makes sense only if they are very similar businesses in the same industry where we can expect similar cost level and gross margin %
• appropriate comparison is with the industry average