Finance & Interest
Intermediate

Return on Assets

Profit generated per dollar of assets.

Formula

ROA=Net IncomeTotal Assets×100ROA = \frac{\text{Net Income}}{\text{Total Assets}}\times 100

Variables

Net IncomeProfit
AssetsTotal assets

Example

Efficiency of asset use

Did You Know?

Return on assets shows how efficiently a company turns everything it owns into profit.

profitability