Free Return on Assets Calculator
Calculate return on assets (ROA) to measure how effectively a company uses its assets to generate profit.
Return on Assets (ROA)
15.00%
Return on Assets (ROA) vs Net Income
How to Calculate Return on Assets
Formula
ROA = (Net Income / Average Total Assets) x 100
ROA tells you how many cents of profit each dollar of assets generates. It combines profitability and asset efficiency into a single metric. Companies with high ROA are squeezing strong profit from a lean asset base, which is a hallmark of well-managed businesses.
Example Calculation
A company earned $150,000 in net income. Total assets were $900,000 at the start and $1,100,000 at the end.
- 01Average Total Assets = ($900,000 + $1,100,000) / 2 = $1,000,000
- 02ROA = ($150,000 / $1,000,000) x 100 = 15%
- 03Each dollar of assets produced 15 cents of net income.
Frequently Asked Questions
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