Metric
Return on Assets (ROA)
Profit per dollar of total assets.
Formula
Net Income ÷ Total Assets
Definition
ROA captures how productively a company uses its entire asset base, regardless of how those assets were financed.
Why it matters
Useful for comparing capital-intensive businesses. Unlike ROE, it isn't flattered by debt, so it can reveal weak underlying economics.
Building blocks
- Net Income
- Final profit left after all costs, interest, and taxes.
- Total Assets
- Everything the company owns, tangible and intangible.
Educational information only, not investment advice. Turtleway helps you understand what a metric or concept means; it does not tell you what to buy or sell.