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Hear_me2001
Newbie
Newbie

Joined: 25 Jun 2009
Online Status: Offline
Posts: 9

Posted: 28 Sep 2011 at 09:27 \| IP Logged

Hello All!

Return on Asset ROA = Net income / Total Assets

Qs: Is it right to say that Return on Asset is Net income
dividend
by asset portion of the equity?

thanks!

divyagovil1
Major Contributor

Joined: 30 Jan 2009
Location: India
Online Status: Offline
Posts: 1456

Posted: 03 Nov 2011 at 01:32 \| IP Logged

The return on assets (ROA) percentage shows how
profitable a company's assets are in generating revenue.

ROA gives an idea as to how efficient management is at
using its assets to generate earnings. Calculated by
dividing a company's annual earnings by its total assets,
ROA is displayed as a percentage. Sometimes this is
referred to as "return on investment".

Note: Some investors add interest expense back into net
income when performing this calculation because they'd
like to use operating returns before cost of borrowing.

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