Return on total assets (ROTA) is one of the profitability indicators that measures how efficiently the firm manages its assets to earn profits. Its formula is a simple ratio of the Operating Profit to the Average Assets of the return on total assets ratiodetermines companies that are using thei...
Return on Investment (ROI) is a performance measure used to evaluate the returns of an investment or to compare the relative efficiency of different investments. ROI measures the return on an investment relative to the cost of the investment. The Return on Investment (ROI) formula: Where “Gain...
The return on investment metric is frequently used because it’s so easy to calculate. Only two figures are required – the benefit and the cost. Because a “return” can mean different things to different people, the ROI formula is easy to use, as there is not a strict definition of “...
Return on equity, or ROE, is a profitability ratio that measures the rate of return on resources provided for by a company’s stockholders’ equity. Hence, it is also known as return on stockholders’ equity or ROSHE.Return on Equity Formula...
Return on total capital is a profitability ratio that measures profit earned by a company using both its debt and equity capital. It is also known as return on invested capital (ROIC) or return on capital employed (ROCE).Return on common equity ratio is normally used to assess profitability....
Formula So what is the return on asset formula? You can easily calculate a company’s ROA by using the following equation: Return on Total Asset Ratio = Net Income / Total Assets A company’s net, after-tax income can usually be found on its income statement for a given period, while ...
The small business can, thus, calculate its ROI simply by dividing its after-tax income by its net worth (the residue after total liabilities are deducted from total assets on the balance sheet) or can use net worth plus long-term debt. Consistency in the use of the formula is, of cours...
Depending on the versions used for calculation of return on investment equation, it is classified as – Net Income ROI, Capital Gain ROI, Total Return, and Annualized Return. #1 – Net Income Method ROI formula = (Net Income / Investment cost) * 100 #2 – Capital Gain Method ROI Formula...
To calculate the investment'stotal return, the investor divides the total investment gains (105 shares x $22 per share = $2,310 current value - $2,000 initial value = $310 total gains) by the initial value of the investment ($2,000) and multiplies by 100 to convert the answer to a...
For example, suppose Jo invested $1,000 in Slice Pizza Corp. in 2017 and sold thesharesfor a total of $1,200 one year later. To calculate the return on this investment, divide the net profits ($1,200 - $1,000 = $200) by the investment cost ($1,000), for an ROI of $200/$...