Intro to Finance
Return on Assets (ROA) is a financial metric that indicates how efficiently a company uses its assets to generate profit. It is calculated by dividing net income by total assets, showcasing how well the company is performing relative to its asset base. This ratio is essential for evaluating a company's operational efficiency and can be analyzed further using the DuPont Analysis to identify the components contributing to ROA, such as profit margin and asset turnover.
congrats on reading the definition of Return on Assets. now let's actually learn it.