ROA
2 July 2021
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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