Return on Assets ROA Ratio Definition, Formula, and Example
This ratio can also be represented as a product of the profit margin and the total asset turnover. A typical ROA will vary depending on the size and industry that a company operates in. Be careful when comparing the ROAs of two companies in different industries. As a general rule, a return on assets under 5% is considered an asset-intensive business, while a return on assets above 20% is considered an asset-light business. The first company earns a return on assets of 10% and the second one earns an ROA of 67%. The Formula for Return on Total Assets – ROTA Is Imagine… Read More
