Home > Term: return on assets
return on assets
Return on assets (ROA) is net income divided by average total assets. ROA can vary widely among companies and is a measure of asset-use efficiency. For example, financial companies with a large amount of assets will typically have ROAs slightly greater than 1% where as a company that is less asset intensive like Microsoft has an ROA of about 28%. It really depends upon the amount of assets necessary for the company to conduct business.
- Part of Speech: noun
- Industry/Domain: Financial services
- Category: Funds
- Company: Merrill Lynch
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