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Return on Assets

 

Retirement Business Return on Assets Calculator

[CP_CALCULATED_FIELDS id=”14″] Return on Assets Explanation

Formula

ROA can be computed as:

Return on Assets = Net Income / Average Total Assets

This number tells you what the company can do with what it has, i.e. how many dollars of earnings they derive from each dollar of assets they control. It’s a useful number for comparing competing companies in the same industry. The number will vary widely across different industries. Return on assets gives an indication of the capital intensity of the company, which will depend on the industry; companies that require large initial investments will generally have lower return on assets. ROAs over 5% are generally considered good.

 


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