How do I calculate the return on assets?
When calculating Return on Assets (ROA) it is important to use the formula of
Net Income / Total Assets. This ratio, expressed as a percentage, provides an indication of how profitable a company is relative to its total assets. ROA is an especially important metric when comparing companies of different sizes, as it shows the efficiency of the company in generating profits in relation to its total assets. To calculate ROA, both Net Income and Total Assets can be found on a company's income statement and balance sheet, respectively. Additionally, Sourcetable offers tools to make the calculation easier.