Return On Assets

Our return on assets calculator online finds the actual percentage of the company’s profit. The return on assets formula is used for calculating ROA from net income and total assets. Our free ROA calculator online helps you to monitor the return on total assets ratio as you can easily know what a return on assets is. 

What Is ROA?

In Finance:

Return on assets is the financial ratio that represents how profitable a company is in relation to total assets. It is used by analysts, business owners, and investors to see stock opportunities. 

If a company generates a high percentage of ROA, it means that it produces a high profit. This technique is used to measure investment and profitability. 

ROA Formula:

Net income can be found at the bottom of the income statement of a company, and the assets are found on its balance sheet. By considering the net income and the total assets, we can gain the return on assets with the help of the following roa equation:

ROA = net income / total assets 

You can find the return on investment with the help of our return on assets calculator. If you are a buyer and want to calculate a final price after a discount, you can take the help of our discount calculator. 

How To Calculate Return On Assets?

Our return on total assets calculator has been created to help you calculate ROA. you can compare yourself with others in the same sector by considering their annual return on total assets percentage. For this purpose, we write up a couple of examples.

Example # 1:

To find the company’s return on total assets by using its net income and average total assets 

Net income = $200,000
Average total assets = $18,0000

As we know the equation to find the return on assets simply divides the net income by their total assets.

ROA = net income / total assets 

ROA = $200000/1800000

ROA = 0.1112

Now, we convert the company's return on total assets as a percentage

ROA = 0.1112 * 100

ROA = 11.12 %

A ROA of 11.12 % means the company earned $0.1112 for every $1 it has in return on asset ratio.

Also, our Depreciation calculator helps you to monitor the actual value of your assets and analyze why your asset value has declined.

Working of ROA Calculator:

ROA is a valuable measure that both the business owners and the investors use to estimate how competently their company generates a profit after using all assets. Here we shed light on the following points that will help in better understanding of our calculator’s working.

Input:

• Put your net income 
• Put the value of your total assets
• Tap “calculate”

Output:

Our return on assets calculator online will give you the following results:

• Return on investment 
• Step-by-step calculations

FAQs:

What Is The Importance Of The ROA On Assets?

ROA is the company’s net profit in relation to the value of its assets. It is one of the important ratios in business. ROA is an important thing that investors use to do their profit calculations. 

If you find out how effective your investments are, then it is necessary to calculate everything which will help you maximize your profit.

What Is a Good Return On Assets Ratio?

ROA is always to be compared amongst the same industry. Generally, a 5% ROA ratio is acceptable and considered good and a 20% ROA value is excellent. 

How Many Assets Should I Have At 30?

If you are able to earn $30,000 per year then your annual salary is equal to the saving by age 30. You should have $30,000 saved on your 30th birthday. 

• If you are 40 your saving is three times your income 
• If you are 50 your saving is six times your income 
• If you are 60 your saving is eight times your income 

What Is The Indication of Negative ROA?

A negative value of return on assets indicates that a company is incurring losses. It means that a company is not generating profits. 

What Is The Daily Life Example Of ROA?

Suppose that there is a company that wants to take a loan from the bank. Surely, in this case, the bank wants to look at their roa calculation means the return on total assets because it helps to represent the company’s efficiency and shows how a company will spend the borrowed money. 

References:

From the source Wikipedia: ROA. 

From the source Lumen Learning: Return on Assets, Example.