Return on Assets (ROA) Calculator

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Annual profit after taxes and all expenses, from the bottom line of the income statement.
Average total assets gives a fairer ROA because profit is earned over the whole year.
Everything the company owns, from the balance sheet.
Splits ROA into net profit margin times asset turnover to show what drives the return.
Removes the effect of how the firm is financed so you can compare operating efficiency.
Currency
Return on assetsHealthy
7.5%
Profit per $1 of assets$0.0750
Asset base used$60,000,000
7.5% %
Loss<0Below average0-5Average5-10Strong10-20Exceptional20+

This company earns 7.5% on its assets, 0.075 of profit per $1 of assets.

  • ROA above ~5% is generally considered solid, but asset-light businesses (software, services) post much higher numbers than asset-heavy ones (utilities, manufacturing).
  • Compare ROA only within the same industry, since capital intensity varies enormously across sectors.
  • Turn on the DuPont breakdown to see whether profit margin or asset turnover is driving the ROA.

Next stepCheck ROE (return on equity) alongside ROA, a big gap between them signals heavy use of debt or leverage.

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