You are currently viewing Definition of Return on Assets (ROA) Ratio

Definition of Return on Assets (ROA) Ratio

Definition: What is Return on Assets (ROA) Ratio?

Return on Assets ratio also called return on total assets. It is the profitability ratio that compares the net income to average total assets to measure the net income produced by total assets during a period.

In other words, this ratio is used to find the efficiency of the company to manage its assets to produce profit during a period.

Definition of Return on Assets (ROA) Ratio

Management and investors use this ratio to see the ability of the company to covert its investment in assets into cash. In simple words, this ratio shows how the profitable the assets of the company are.

Financial Ratio is a forum where you will learn about all ratios definitions and formulas.

Leave a Reply