Corporate messenger on your server in 10 minutes

[Joywtome231]

What is Return on Assets: Components and Calculation Formula
ROA — Return on Assets — is translated as return on assets. This is a significant economic indicator for any enterprise, which helps to understand how effectively the business uses the resources under its control to generate net profit. In other words, the value of the coefficient demonstrates what part of the profit the business receives from each ruble invested in assets.


Before determining the ROA formula, you need to get acquainted with the indicators that determine this coefficient. ROA consists of two elements: net profit, average asset size.

1) Assets. These are the resources that the enterprise has. They are used to cambodia phone number list run the business, help generate income or reduce expenses. In this case, useful assets are divided into:

Current. These are resources that the company constantly uses in its operating activities. In fact, current assets are those resources that can be quickly converted into money: within one year or one operating cycle. For example, accounts receivable, inventory, materials, raw materials.
Non-current. These are long-term resources that are needed for production. Business uses them in the long term: a year or more. For example, buildings, real estate, equipment, and so on.
Material. These are physical, tangible resources. They can be both current and non-current: stocks, vehicles, structures, etc.
Intangible. These are assets that do not have a physical form, but have value for the company: licenses, patents, reputation.
The Return on Assets ratio can be calculated separately for both non-current and current assets.

We will provide a free period. We will help you set up Compass on your servers or in the cloud. We will simplify the move and adaptation of the team.
Order a consultation
However, the standard formula for calculating return on assets implies full, total assets: current + non-current. In addition, we note that the ROA value will take into account not only the founders' own funds, but also the business's borrowed funds.