What is Return on assets (ROA)?
Also known as: ROA
A ratio that shows how much net profit every 100 soum of assets at the company's disposal brought in over a year. Formula: net profit ÷ assets × 100%. If assets changed considerably during the year, the average of the values at the beginning and end of the period is used; when comparing ROA from different sources, check how the denominator was taken. The difference from return on equity (ROE): ROA does not depend on how the assets were financed (owners' money or debt), so it shows how efficiently management uses resources. In asset-intensive industries (factories, transport), ROA is naturally lower than in service companies.