What is Return on Assets (ROA)?
ROA shows how efficiently a company turns its asset base into profit. It's most useful for asset-heavy businesses like banks, REITs, and industrial manufacturers, where the size and productivity of the asset base is the core economic driver.
Formula
ROA = Net Income ÷ Total Assets
How TopTier Strategy uses Return on Assets (ROA)
ROA appears in our Returns pillar primarily for asset-heavy sectors where ROIC and ROE alone miss the operational efficiency story.
Related Glossary Terms
Other concepts in the Returns pillar.
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