What Is Return On Assets (ROA)?

Return on Assets, or ROA, is an indicator of the profitability of a firm relative to the assets of the firm. The calculation for ROA is:

  • Net Income / Total Assets

Return on Assets is used to assess how efficiently the assets of the firm are being used to produce profits, and it can be compared between similar companies to give an idea of the relative performance and efficiency of a firm. The higher the return on assets of a firm, the more efficiently it is using its assets.

To learn more about this concept and become a master at Financial Statement modeling, you should check out our FSM Modeling Course. Learn more here. 

Module 1: Getting Started

Module 2: Fundamental Concepts

Module 3: The Income Statement

Module 4: Working Capital

Module 5: PP&E and Intangibles

Module 6: The Cash Flow Statement

Module 7: Debt & Interest Schedule

Module 8: Finishing Your Model

Module 9: Bonus

Learn More Here

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