Posted inAll sectors / Finance & Control / Financial

Return on Assets (ROA)

Definition of this KPI:
Return on Assets (ROA) is a fundamental financial ratio that measures a company's ability to generate profits relative to its total assets. It's a key performance indicator (KPI) that provides valuable insights into a company's efficiency in utilizing its assets to generate earnings. ROA is an important metric for both investors and business leaders as it helps assess the overall financial performance and effectiveness of asset management.

  • This KPI can be calculated as: Net income / Average Total Assets
  • The KPI will be measured as: ratio (number)
  • How to interpret the KPI: higher is better
  • The strategic objective to measure with this KPI: Financial stability
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