Return on assets, or ROA, is calculated by dividing net income by the company’s average total assets. It's a measure of how efficiently a company's management is using its assets to generate profits.The higher the ROA, the better, because it indicates the company is more efficient at using its assets to generate profit.
Learn Return on Assets with interactive examples and practice exercises in our Performance Metrics module.
This interactive learning module helps you understand Return on Assets through hands-on practice and real-world examples.