Return on Assets Calculator

Instructions: You can use this Return on Assets Calculator \((ROA)\), by providing the Net Income and the current total assets in the form below:

Net Income =
Total Assets =

Return on Assets Calculator

More about the Return on Assets so you can better use the results provided by this finance calculator


The Return on Assets \((ROA)\) is the ratio of net income to total assets. This ratio is a profitability measure, and it indicates how many dollars in net income a firm has for each $1 in total assets.

How do you calculate the return on assets? What formula do you use?

In order to calculate the ROA, we use the following formula:

\[ \text{ROA} = \displaystyle \frac{\text{Net Income}}{\text{Total Assets}}\]

What is a good return on assets? In general terms, the largest, the better. A high ROA means that the management team is capable of creating income from the firm's assets.

A similar metric, and a useful tool is this return on equity calculator, which measures the ability of a firm of generating income from its equity.

ROA Calculator

Example: Calculation of Return on Assets

Question: Assume that you are the manager of a company that has a net income of $15,000, and the value of its assets is $400,000. Compute the firm's return on assets.


This is the information we have been provided with:

Net Income = \(15000\)
Total Assets = \(400000\)

The return on assets \((ROA)\) is computed using the following formula:

\[ \begin{array}{ccl} ROA & = & \displaystyle \frac{\text{Net Income}}{\text{Total Assets}} \\\\ \\\\ & = & \displaystyle \frac{\text{\textdollar}15000}{\text{\textdollar}400000} \\\\ \\\\ & = & 0.0375 \end{array} \]

Therefore, the return on assets for the given net income of \(\text{\textdollar}15000\) and total assets of \(\text{\textdollar}400000\) is \(ROA = 0.0375 = 3.75\%\). This means the company generates \(\text{\textdollar}0.04\) in net income for every $1 in total assets.

Calculators for other financial ratios

In corporate finance, the use of financial ratios is crucial to get a quick snapshot of the financial status of a company in absolute terms, and relative to the industry it operates in.

The Return on Assets (ROA) is a very commonly used financial ratio to measure efficiency in assets management. You can find many other financial ratio calculators in our site, including our current ratio , quick ratio , our days' sales in receivables , and our inventory turnover calculator.

Another interesting measure to look into when investigating about the Return on Asset for a firm is the Total Asset turnover

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