ROA Calculator

# ROA Calculator

Net Income:
\$
Total Assets:
\$

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• ## How is ROA Calculated?

### What is ROA?

ROA is short for return of assets. Turkish is active profitability. ROA is calculated by dividing the net income of a business by assets. ROA (asset profitability) refers to the net profit associated with the company's asset values. In this way, the profitability of the assets can be evaluated. This indicator also tells how profitable it is to make a profit in the company's assets.

#### Why ROA Matters?

ROA provides useful financial information about the company. For example, when a company wants to get a loan, the bank will want to look at ROA data. Because ROA gives information about how effectively the business will spend the borrowed money. In addition, it can assess whether the business should change strategy on sales and asset management.

#### How is ROA Calculated?

ROA is to divide the net profit by total assets when calculating. The point to remember is that since ROA is expressed as a percentage, it should be multiplied by 100 and read with%.
For example; The assets of a business with a net profit of \$ 500 are \$ 1000. In this case, ROA = 500/1000 = 0.5.
ROA value will be 50%.