ROA
#23GUIDING QUESTION
How productive are your assets?
Return on assets: EBIT/Total assets.
01.What it is
It measures the overall economic efficiency of assets regardless of how they are financed.
02.Component masses
- EBIT
- Total assets
03.Formula
MAIN FORMULA
ROA: EBIT ÷ Total assets(%)
04.Interpretation
- > 15% very efficient; 5–10% acceptable; < 3–4% low (except in capital-intensive sectors).
05.Related to
- ROE
- ROI/ROIC
- DuPont (Margin × Turnover)