Return on Assets Interpretation
What is Return on Assets
Return on Assets (ROA) is an indicator of how profitable company's assets are in generating profit.
Return on Assets formula is:
Return on Assets shows how many dollars of earnings result from each dollar of assets the company controls.
Return on Assets Analysis
Return on Assets ratio gives an idea of how efficient management is at using its assets to generate profit.
Return on Assets can vary substantially across different industries. This is the reason why it is recommended to compare it against company's previous values or the return of a similar company.
The only common rule is that the higher return on assets is, the better, because the company is earning more money on its assets.
A low return on assets compared with the industry average indicates inefficient use of company's assets.
Return on Assets is one of the profitability ratios and is usually expressed as a percentage.
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Return on Assets calculator measures how profitable company's assets are in generating profit, how efficient management is at using its assets to generate profit. Return on Assets formula is:
Return on Assets calculator is part of the Online financial ratios calculators, complements of our consulting team.
Terms of use
 Complementarily, in order to calculate the Return on Assets for your business, we offer a calculator free of charge.

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Definitions and terms used in Return on Assets Calculator
 Net Income
 The income that a company has after subtracting costs and expenses from the total revenue. Net income is sometimes called the bottom line.
 Also known as earnings, net earnings or net profit.
 Total Assets
 The economic resources owned by a business. The assets are divided in two major classes: tangible assets (physical resources) and intangible assets (nonphysical resources and rights like goodwill, copyrights, trademarks and patents). In order to have a more accurate figure of return on assets it is recommended to use average total assets.