no one financial ratio should be used to determine a company's financial performance or potential value as an investment. Other common profitability measures that investors can use includereturn on equity (ROE)and
Return on Operating Assets Another standard measurement of assets and the returns they produce is known as the "return on operating assets" (ROOA). It is similar to ROA in that it measures the return on assets. But ROOA measures the return on assets that are actually in use. ...
As a commercial real estate investor, one of the key questions you’ll need to ask regularly is how your assets are performing.
and its total assets (found on the balance sheet) as $40.2 billion. So the math looks like this: $14.1 billion / $40.2 billion = 0.351. Move the decimal point two places to the right, and you get a return on assets of
The return on assets is computed below: Explanation: Step 1: Determine the average total assets as follows: Average total assets = (Beginning...Become a member and unlock all Study Answers Start today. Try it now Create an account Ask a question Our experts can answer your toug...
Return on Assets: Definition, Formula & Example from Chapter 22 / Lesson 47 7.5K Return on assets is calculated by dividing net income by total assets and the result of the calculation can tell how well a business is using its assets to generate net income. Learn more about it's formu...
Return on Assets Return on assets, ROA, is related to return on equity through financial leverage ratio. Return on assets is net income divided by the total value of a company’s assets, and return on equity is net income divided by the total value of the company’s equity. They dif...
The return is measured by evaluating revenue lines, cost reduction mechanisms, or closed down poorly performing divisions. Companies determine the profits attributable to data assets by creating visual representations that show key performance indicators, trends, and revenue streams that can be leveraged....
The return on invested capital is a common profitability ratio. You can use it to determine the performance of a company in terms of how much money it is making compared to the amount of money investors have put in. It can help show whether a company has
By taking on debt, a company increases its assets. Therefore, when looking at ROA, the numerator (return) would stay the same, but the denominator (assets) would increase. Therefore, the ratio of returns to assets would decrease. Alternatively, a company's returns and equity remain unchanged...