how to calculate ror
net income is divided by revenue which will yield a decimal the result can be multiplied by 100 to make the result a percentage return on revenue uses net income which is calculated as revenues minus expenses the calculation includes both expenses paid in cash and non cash expenses such as depreciation the net income calculation includes all of the business activities of the company which includes day to day operations and unusual items such as the sale of a building revenue represents the total revenue from sales or the net revenue after rebates have been granted for returned merchandise if net revenue is used by a company it ll be calculated for investors and reported on the top line of the income statement 