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.
^Susan V. Crosson; Belverd E. Needles, Jr.; Belverd E. Needles; Powers, Marian (2008). Principles of accounting. Boston: Houghton Mifflin. p. 209. ISBN978-0-618-73661-4.
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Return On Assets - ROA
February 06, 2023
return, assets, return, assets, shows, percentage, profitable, company, assets, generating, revenue, computed, below, income, average, total, assets, displaystyle, mathrm, frac, mbox, income, mbox, average, total, assets, this, number, tells, what, company, wi. The return on assets ROA shows the percentage of how profitable a company s assets are in generating revenue ROA can be computed as below R O A Net Income Average Total Assets displaystyle mathrm ROA frac mbox Net Income mbox Average Total Assets 1 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 Contents 1 Usage 2 See also 3 References 4 External linksUsage EditReturn on assets is one of the elements used in financial analysis using the Du Pont Identity See also EditReturn on equity ROE List of business and finance abbreviations Rate of return on a portfolio Return on brand ROB Return on capital ROC Return on investment ROI Weighted average return on assets WARA References Edit Susan V Crosson Belverd E Needles Jr Belverd E Needles Powers Marian 2008 Principles of accounting Boston Houghton Mifflin p 209 ISBN 978 0 618 73661 4 External links EditReturn On Assets ROA Retrieved from https en wikipedia org w index php title Return on assets amp oldid 1123382363, wikipedia, wiki, book, books, library,
