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The return on assets ( ROA) shows the percentage of how profitable a company's assets are in generating revenue . ROA can be computed as below: [1] The phrase return on average assets (ROAA) is also used, to emphasize that average assets are used in the above formula. [2]
DuPont analysis (also known as the DuPont identity, DuPont equation, DuPont framework, DuPont model, DuPont method or DuPont system) is a tool used in financial analysis, where return on equity (ROE) is separated into its component parts. Useful in several contexts, this "decomposition" of ROE allows financial managers to focus on the key ...
Return on investment. Return on investment ( ROI) or return on costs ( ROC) is the ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time). A high ROI means the investment's gains compare favourably to its cost. As a performance measure, ROI is used to evaluate the ...
Return on equity (ROE) and return on assets (ROA) determine how efficient a company can be at generating profits. Both formulas that can help investors determine how good a company is at turning a ...
The strength of a company isn’t just about how much money it makes. Investors also want to know how efficiently a company uses its assets, over a set period of time, based on its size and ...
Return on capital. Return on capital ( ROC ), or return on invested capital ( ROIC ), is a ratio used in finance, valuation and accounting, as a measure of the profitability and value-creating potential of companies relative to the amount of capital invested by shareholders and other debtholders. [1] It indicates how effective a company is at ...
Rate of return on a portfolio. The rate of return on a portfolio is the ratio of the net gain or loss (which is the total of net income, foreign currency appreciation and capital gain, whether realized or not) which a portfolio generates, relative to the size of the portfolio. It is measured over a period of time, commonly a year.
The weighted average return on assets, or WARA, is the collective rates of return on the various types of tangible and intangible assets of a company. The presumption of a WARA is that each class of a company's asset base (such as manufacturing equipment, contracts, software, brand names, etc.) carries its own rate of return, each unique to the ...