A mathematical statement used to evaluate a value. An equation can use any combination of mathematical operations, including addition, subtraction, division, or multiplication. An equation can be already established due to the properties of numbers (2 + 2 = 4), or can be filled solely with variables which can be replaced with numerical values to get a resulting value. For example, the equation to calculate return on sales is: Net income ÷ Sales revenue = Return on Sales. When the values for net income and sales revenue are plugged into the equation, you are able to calculate the value of return on sales.
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