Define and Discuss on Return on Assets

Major purpose of this article is to Define and Discuss on Return on Assets. Return on assets is generally used for comparing the performance of financial institutions because majority of their assets will have carrying value close to the market value. The businesses with low margins such as customer products will carry a lower ratio while businesses such as software will confirmation higher ratio. The businesses that need a high capital investment also will have a lower ROA ratio. This ratio is considered as below: ROA = Net Income / Total Assets.