Return on Assets (ROA) Calculator: Measure Your Company’s Profitability
Return on Assets (ROA) = Net Income ÷ Average Total Assets × 100 %. The metric reveals how efficiently your company turns assets into profit. U.S. non-financial corporations posted a 7.9 % median ROA in 2022 (Federal Reserve Financial Accounts, 2023). Enter income and assets, press calculate, and compare your figure with industry norms.
Return on Assets (ROA) Calculator
Return on Assets (ROA)
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How to use the tool
Step 1 – Enter Net Income: key in your profit after tax, e.g., 675 000 or 2 150 000.
Step 2 – Enter Average Total Assets: supply the period-average asset value, e.g., 4 500 000 or 18 750 000.
Step 3 – Press “Calculate”: the tool returns ROA as a percentage.
A ROA above 5 % beats the long-run U.S. corporate median (Investopedia, 2023).
Why compare ROA within the same industry?
Asset intensity differs; utilities own heavy infrastructure, software firms do not (Damodaran, 2023).
Can ROA be negative?
Yes. Losses make net income negative, turning ROA negative and warning of unprofitable assets (SEC Staff Accounting Bulletin, 2022).
Does debt affect ROA?
ROA ignores financing; it focuses on assets regardless of whether funded by debt or equity (CFI, 2023).
How often should you track ROA?
Quarterly tracking aligns with standard financial reporting cycles (FASB, 2021).
Is ROA the same as ROI?
No. ROI measures return on any investment, whereas ROA measures return on total assets (Investopedia, 2023).
How can you improve ROA?
Increase income (raise margins) or reduce idle assets (sell under-used equipment) (McKinsey Operations Insights, 2022).
What if ROA is stable while income grows?
Asset base is expanding proportionally; efficiency hasn’t changed (Federal Reserve Z.1 Report, 2023).
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