return on assets (ROA)

  

Definition

Ratio measuring the operating profitability of a (non-financial) firm, expressed as a percentage of the operating assets. ROA indicates a firm's ability to efficiently allocate and manage its resources but (unlike 'return on equity') ignores the firm's liabilities. Also called return on total investment (ROTI). Formula: Operating income x 100 √∑ Operating assets.

Use this term in a sentence

  • I was afraid to check out the return on assets because I was not knowledgeable enough to look into such matters.

    6 people found this helpful    
  • The return on assets was steadily increasing quarter after quarter which proved the new managers strategy to be quite effective.

    9 people found this helpful    
  • You need to try and figure out how to get the greatest return on assets that you can and execute that plan.

    7 people found this helpful    
Show more usage examples...

Related Videos




http://www.businessdictionary.com/definition/return-on-assets-ROA.html

Have a question about this term? Ask for help in the
Community
Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z