Return on assets (ROA)

Also called: return on assets

Profit made for every 1 of assets the company owns.

Formula

ROA = Net income ÷ Total assets

Worked example

1. Net income = $1.5bn
2. Total assets = $18.0bn
3. $1.5bn ÷ $18.0bn

Result: 8.3%

How to read it

Useful for asset-heavy businesses such as banks and manufacturers. Above 5% is generally decent.

Worked example uses made-up figures for 'Example plc'

See it with real numbers: Any company page → (free account)