ROA ratio
WHAT IS IT ?
Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets. ROA gives a manager, investor, or analyst an idea as to how efficient a company's management is at using its assets to generate earnings. Return on assets is displayed as a percentage.
CALCULATION:
EXAMPLE:
I invested 10,000 Euros. The profit from this investment was 2,000 Euros.
Then,
ROA = 2000 / 10,000
ROA = 0.2, that is, 20%
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