# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

This figure is the percentage a company earns on its assets in a given year (Year 1, 2, etc.).

The calculation is net income divided by average total assets. The resulting figure is then multiplied by 100. ROA shows how much profit a company generates on its asset base. The better the company, the more profit it generates as a percentage of its assets. The company's net income is found in the annual income statement. The company's total assets are found in the annual balance sheet.

For example, a major software company was earning more than 20% on its assets-an incredible level of profitability. For every $1 of assets, the company was able to produce more than $0.20 of profits.

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