ROA

ROA stands for Return on Assets and measures a company's profitability relative to the assets it owns. By comparing the income in a given period to the total assets a company controls, ROA provides an insight into the ability of a business to generate money from the machinery, equipments, buildings etc. it has.

 

ROA = (Net Income during period t / Total Assets at the end of period t) x 100

 

This indicator is included in the book: Key Performance Indicators - the 75+ measures every manager needs to know, which contains an in-depth description of this KPI, as well as practical advice on data collection, calculations, target setting, and actual usage.

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