## Return on Assets Ratio Calculator

It is important to keep track of your company’s performance as a business owner or investor. The return on assets **(ROA) **ratio is one of the most important metrics to track.

ROA is a financial ratio that shows how much profit a company makes per dollar of assets.

## What is the return on assets ratio?

The return on assets (ROA) ratio is a measure of how well a company can make money from its assets.

The ratio figures out the relationship between a business’s net income and all of its assets. It shows how well a company is able to use its assets to generate profit.

## What does the return on assets ratio result mean?

The ROA result shows how much profit a company generates per dollar of assets.

If a company has a **high ROA**, it means that it is making good use of its assets to make money.

A **low ROA**, on the other hand, could indicate that a company isn’t making the best use of its assets, which could indicate operational or financial issues.

## What is the return on assets ratio calculator?

A return on assets ratio calculator is a tool that helps you figure out your company’s ROA ratio.

It is a quick and easy way to find out how your company is doing financially and use that information to make sound business decisions.

## How does the return on assets ratio calculator work?

The return on assets ratio calculator uses a simple formula to calculate the ROA ratio of your business. The formula is:

Return on Assets **(ROA)** = Net Income / Average Total Assets

The calculator takes the net income and average total assets of your business as inputs and calculates the ROA ratio.

The result is shown as a percentage, which shows how well your business is using its assets.

## Benefits of using our return on assets ratio calculator

Using our return on assets ratio calculator has several benefits:

**Easy to Use:**The calculator is user-friendly and easy to navigate, making it accessible for anyone to use.**Accurate Results:**The calculator gives you accurate results, so you can make business decisions based on reliable information.**Saves Time:**The calculator saves you time by doing the math for you, so you can work on other parts of your business.

## Return on assets ratio formula

The return on assets ratio formula is:

Return on Assets (ROA) = Net Income / Average Total Assets

The formula measures a business’s net income in relation to its average total assets.

**Net income** is the total income earned by a business during a specific period, minus expenses.

Total** assets **include all of a company’s assets, including inventory, property, and equipment.

## Example

Assume your company earned $100,000 in net income and had assets worth $200,000 at the start of the year and $300,000 at the end of the year.

Using the return on assets ratio formula, we can calculate the ROA ratio as follows:

ROA = $100,000 / {($200,000+$300,000)/2}

ROA = 0.40 or 40%

This means that your business made 40 cents in profit for every dollar of assets.

## How do you use our return on assets ratio calculator?

It is simple to use our return on assets ratio calculator.

- Simply enter your company’s net income and total asset value at the beginning and end of the year, and the calculator will calculate the ROA ratio for you.
- To reset the calculator, press the reset button to clear all fields.

**Finally**, understanding the return on assets ratio is critical for assessing your company’s financial health.

Using our return on assets ratio calculator is a quick and easy way to calculate the ratio and gain valuable insights into the performance of your business.

With this information, you can make **informed business decisions,** such as identifying areas for improvement and making changes to increase profitability.

Don’t put it off any longer; try our return on **assets ratio calculator** today and take the first step toward understanding the financial performance of your company.