ROS/RMS
BOS
ROS/RMS Components
What is measured:
How it is measured?
Scale:
There are three main components of an ROS/RMS graph:
profitability, relative market share and the normative band.
* This tool is typically called ROS/RMS since ROS is the most common profitability measure used
**Allows for easy viewing of a doubling in relative market share
Profitability
(y-axis)
Current profitability
–
return on capital
employed
–
return on equity
–
return on assets
–
return on sales*
Linear
RMS
(x-axis)
Accumulated
experience and
strategic position
Relative market share
(RMS)
Logarithmic**
Normative band
Range of predicted
profitability
Plus and minus one
standard deviation
from regression line
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