{"id":10478,"date":"2023-04-24T16:01:03","date_gmt":"2023-04-24T10:31:03","guid":{"rendered":"https:\/\/www.tickertape.in\/glossary\/?p=10478"},"modified":"2023-04-24T16:01:26","modified_gmt":"2023-04-24T10:31:26","slug":"return-on-assets","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/glossary\/return-on-assets\/","title":{"rendered":"Return on Assets &#8211; Meaning, Calculation with Example, Limitations and ROA vs ROE"},"content":{"rendered":"\n<p>Return on Assets (ROA) is a financial ratio that measures a company&#8217;s profitability against its total assets. It is used by corporate management, analysts, and investors to assess how effectively a company uses its resources and assets to generate profit.<\/p>\n\n\n\n<p>Read further to learn the return on assets meaning, how to calculate it, and its importance.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_22 counter-hierarchy counter-numeric\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">You will Learn About: <\/p>\n<span class=\"ez-toc-title-toggle\"><a class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" style=\"display: none;\"><i class=\"ez-toc-glyphicon ez-toc-icon-toggle\"><\/i><\/a><\/span><\/div>\n<nav><ul class=\"ez-toc-list ez-toc-list-level-1\"><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/glossary\/return-on-assets\/#What-is-the-return-on-assets\" title=\"What is the return on assets?\">What is the return on assets?<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/glossary\/return-on-assets\/#Return-on-Assets-Main-Highlights\" title=\"Return on Assets &#8211; Main Highlights!\">Return on Assets &#8211; Main Highlights!<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/glossary\/return-on-assets\/#How-to-calculate-return-on-assets-ROA\" title=\"How to calculate return on assets (ROA)?\">How to calculate return on assets (ROA)?<\/a><ul class=\"ez-toc-list-level-3\"><li class=\"ez-toc-heading-level-3\"><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/glossary\/return-on-assets\/#Example-of-return-on-assets-ROA\" title=\"Example of return on assets (ROA)\">Example of return on assets (ROA)<\/a><\/li><\/ul><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/glossary\/return-on-assets\/#What-is-a-good-return-on-assets-ratio\" title=\"What is a good return on assets ratio?\">What is a good return on assets ratio?<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/glossary\/return-on-assets\/#Return-on-assets-interpretation\" title=\"Return on assets interpretation\">Return on assets interpretation<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/glossary\/return-on-assets\/#What-return-on-assets-ROA-means-to-investors\" title=\"What return on assets (ROA) means to investors?\">What return on assets (ROA) means to investors?<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/glossary\/return-on-assets\/#What-are-the-limitations-of-ROA\" title=\"What are the limitations of ROA?\">What are the limitations of ROA?<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/glossary\/return-on-assets\/#ROA-vs-ROE\" title=\"ROA vs ROE\">ROA vs ROE<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/glossary\/return-on-assets\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/glossary\/return-on-assets\/#FAQs\" title=\"FAQs\">FAQs<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What-is-the-return-on-assets\"><\/span><strong>What is the return on assets?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-medium\"><img decoding=\"async\" loading=\"lazy\" width=\"300\" height=\"300\" src=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/peer-peer-insurance-abstract-concept-illustration_335657-4888.jpg-300x300.webp\" alt=\"\" class=\"wp-image-10479\" srcset=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/peer-peer-insurance-abstract-concept-illustration_335657-4888.jpg-150x150@2x.webp 300w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/peer-peer-insurance-abstract-concept-illustration_335657-4888.jpg-1024x1024.webp 1024w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/peer-peer-insurance-abstract-concept-illustration_335657-4888.jpg-150x150.webp 150w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/peer-peer-insurance-abstract-concept-illustration_335657-4888.jpg-70x70.webp 70w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/peer-peer-insurance-abstract-concept-illustration_335657-4888.jpg-370x370.webp 370w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/peer-peer-insurance-abstract-concept-illustration_335657-4888.jpg.webp 1380w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/peer-peer-insurance-abstract-concept-illustration_335657-4888.jpg-300x300@2x.webp 600w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/figure><\/div>\n\n\n<p>Return on assets, also called return on total assets, is a measure that evaluates the profitability of an organisation by comparing its net earnings to the average total assets. In other words, a company&#8217;s ability to effectively manage its assets and generate long-term profits is measured by the return on assets ratio.<\/p>\n\n\n\n<p>Considering <a href=\"https:\/\/www.tickertape.in\/glossary\/what-is-capital-definition-of-capital-types-and-its-importance\/\">capital<\/a> assets are often significant investments for most businesses, ROA can be an accurate measure of a company\u2019s performance and future growth.&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-uagb-advanced-heading uagb-block-e90cff04\"><h2 class=\"uagb-heading-text\"><span class=\"ez-toc-section\" id=\"Return-on-Assets-Main-Highlights\"><\/span><strong>Return on Assets &#8211; Main Highlights!<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2><\/div>\n\n\n\n<ul>\n<li>The return on assets ratio measures a company&#8217;s profitability against its total assets.<\/li>\n\n\n\n<li>To calculate ROA, you can divide the <a href=\"https:\/\/www.tickertape.in\/glossary\/net-income\/\">net income<\/a> by the total assets of a company.&nbsp;<\/li>\n\n\n\n<li>ROA and ROE (<a href=\"https:\/\/www.tickertape.in\/glossary\/return-on-equity\/\">Return on Equity<\/a>) are not the same. ROA depicts the profitability of a business against its assets, whereas ROE is a measure of profitability against shareholders\u2019 equity.&nbsp;<\/li>\n\n\n\n<li>Asset-intensive industries like Oil and Gas, airlines, real estate etc., typically have less ROA, whereas industries like financial services, software etc., have high ROA.&nbsp;<\/li>\n\n\n\n<li>A ratio above 10-15% can be considered an ideal ROA.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"How-to-calculate-return-on-assets-ROA\"><\/span><strong>How to calculate return on assets<\/strong><strong> (ROA)?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The return on assets formula is:<\/p>\n\n\n\n<p><strong>ROA = Net income \/ Average total assets<\/strong><\/p>\n\n\n\n<p>Where,<\/p>\n\n\n\n<ul>\n<li>Net Income = Net earnings in that financial year<\/li>\n\n\n\n<li>Average total assets= Ending assets &#8211; beginning assets \/ 2<\/li>\n<\/ul>\n\n\n\n<p>There is another formula where the net profit margin is multiplied by the asset turnover rate to get ROA.&nbsp; Let\u2019s understand this with an example.<\/p>\n\n\n\n<h3><span class=\"ez-toc-section\" id=\"Example-of-return-on-assets-ROA\"><\/span><strong>Example of <\/strong><strong>return on assets<\/strong><strong> (ROA)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Let\u2019s assume that a company\u2019s net income is Rs. 15 cr., its <a href=\"https:\/\/www.tickertape.in\/glossary\/total-revenue\/\">total revenue<\/a> is Rs. 150 cr., and its asset turnover is Rs. 90 cr.&nbsp;<\/p>\n\n\n\n<p>To calculate the return on assets, we start by calculating the company&#8217;s net profit margin by dividing its net income by its total revenue:<\/p>\n\n\n\n<p><strong>Net profit margin<\/strong> = 15 \/ 150&nbsp; = 0.1 (10%)<\/p>\n\n\n\n<p>Next, we divide the company&#8217;s total revenue by its average total assets to determine the asset turnover rate.<\/p>\n\n\n\n<p><strong>Asset turnover rate<\/strong> = 150 \/ 90 = 1.667<\/p>\n\n\n\n<p>Lastly, we multiply the company&#8217;s asset turnover by the net profit margin to find the ROA.<\/p>\n\n\n\n<p><strong>ROA<\/strong> = 0.1 x 1.667 x 100 = 16.7%&nbsp;<\/p>\n\n\n\n<p>Alternatively, use <a href=\"https:\/\/www.tickertape.in\/screener\/equity?utm_source=glossary&amp;utm_medium=article&amp;utm_campaign=\" target=\"_blank\" rel=\"noreferrer noopener\">Tickertape Stock Screener<\/a> to find the ROA of a company. There are over 200+ filters that can help you in finding the best stocks based on various parameters like market cap, 1-yr returns, net profit, etc. <\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"509\" src=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Screenshot-2023-04-19-at-4.01.13-PM-1024x509.png\" alt=\"\" class=\"wp-image-10480\" srcset=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Screenshot-2023-04-19-at-4.01.13-PM-1024x509.png 1024w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Screenshot-2023-04-19-at-4.01.13-PM-300x149.png 300w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Screenshot-2023-04-19-at-4.01.13-PM-1536x764.png 1536w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Screenshot-2023-04-19-at-4.01.13-PM-1024x509@2x.png 2048w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Screenshot-2023-04-19-at-4.01.13-PM-300x149@2x.png 600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n<h2><span class=\"ez-toc-section\" id=\"What-is-a-good-return-on-assets-ratio\"><\/span><strong>What is a good <\/strong><strong>return on assets ratio<\/strong><strong>?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Generally, a ROA of over 5% is considered good, and one of over 20% is considered exceptional.&nbsp;<\/p>\n\n\n\n<p>However, ROA should always be compared with companies in the same industry. For instance, comparing the ROA of a software company with that of an automobile company will not yield any results because the automobile firm will have significantly more assets than the software company.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Return-on-assets-interpretation\"><\/span><strong>Return on assets interpretation<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Investors find a high ROA ratio more appealing since it shows that the company is more adept at managing its assets.&nbsp;<\/p>\n\n\n\n<p>ROA can be an important measure when comparing companies in the same industry. A good ROA ratio typically indicates an upward profit trend, whereas a declining ROA may suggest a business has not rightfully leveraged its assets. A low ROA could mean decreased sales or revenue, which can directly hamper profitability.<\/p>\n\n\n\n<p>Additionally, ROA also helps determine how asset-intensive a corporation is. Companies in Oil and Gas, chemicals etc., are typically asset-intensive and have low ROA. On the other hand, industries like software etc., are not asset-intensive and have high ROA.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"What-return-on-assets-ROA-means-to-investors\"><\/span><strong>What <\/strong><strong>return on assets<\/strong><strong> (ROA) means to investors?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>ROA can be employed to compare companies within the same industry or sector. Investors can utilise the ROA ratio to identify promising <a href=\"https:\/\/www.tickertape.in\/glossary\/stock\/\">stock<\/a> opportunities and study the relationship between income and assets to predict future growth and revenue.&nbsp;<\/p>\n\n\n\n<p>A rising ROA over time shows the business is performing well and growing. In comparison, a declining ROA may suggest that the corporation is underutilising its assets to generate income.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"What-are-the-limitations-of-ROA\"><\/span><strong>What are the limitations of ROA?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Although calculating ROA is useful in various ways, it is not the only technique to assess a company&#8217;s effectiveness and financial stability.&nbsp;<\/p>\n\n\n\n<p>Numerous other elements, like market conditions, consumer demand, etc., can affect a company&#8217;s performance and net income. Therefore, the return on assets ratio should be studied along with other metrics, such as ROE, to obtain a complete picture of a company&#8217;s financial health.<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"ROA-vs-ROE\"><\/span><strong>ROA vs ROE<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/image-17-1024x819.png\" alt=\"\" class=\"wp-image-10481\" width=\"512\" height=\"410\" srcset=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/image-17-1024x819.png 1024w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/image-17-300x240.png 300w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/image-17-1536x1229.png 1536w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/image-17-300x240@2x.png 600w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/figure><\/div>\n\n\n<p>Of the many tools and ratios, there are two primary metrics managers and investors look at to gauge a company&#8217;s profitability \u2013 ROA and ROE. Both take profitability into account but are different concepts.&nbsp;<\/p>\n\n\n\n<p>ROA is a measure that depicts a company&#8217;s profitability compared to its total assets. It demonstrates how effectively (or ineffectively) a business uses all its resources, including machinery, transport, and intellectual property, to generate revenue. ROE, on the other hand, measures profitability against shareholders\u2019 equity. It assesses the returns a company produces against employed shareholders\u2019 funds.&nbsp;<\/p>\n\n\n\n<p>ROE is calculated by dividing a company&#8217;s net earnings by its shareholder&#8217;s equity, while ROA is calculated by dividing the net income by total average assets.&nbsp;<\/p>\n\n\n\n<p>The large difference between these two ratios is that in the case of ROE, profit is measured against shareholders\u2019 funds, whereas, for ROA, profit is measured against the total average asset.&nbsp;<\/p>\n\n\n\n<p>Use <a href=\"https:\/\/www.tickertape.in\/screener\/equity?utm_source=glossary&amp;utm_medium=article&amp;utm_campaign=\" target=\"_blank\" rel=\"noreferrer noopener\">Tickertape Stock Screener<\/a> to analyse a stock using the profitability ratios like ROA, ROE, etc. <\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The ROA shows how effectively a business uses its assets to generate profits. Investors can use it to identify potential <a href=\"https:\/\/www.tickertape.in\/glossary\/investment-meaning-types-how-to-invest-and-savings-vs-investments\/\">investment<\/a> opportunities. An increasing ROA shows that the company profits from each rupee invested in its assets. On the other hand, a declining ROA means that the corporation has invested in assets that aren\u2019t yielding enough revenue. Understand ROA and then invest in companies.<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"FAQs\"><\/span><strong>FAQs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-uagb-faq uagb-faq__outer-wrap uagb-block-da287c7b uagb-faq-icon-row uagb-faq-layout-accordion uagb-faq-expand-first-true uagb-faq-inactive-other-true uagb-faq__wrap uagb-buttons-layout-wrap uagb-faq-equal-height\" data-faqtoggle=\"true\" role=\"tablist\">\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-722fdf54\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>What is considered a good ROA?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">Generally, a high ROA can be due to increased profits. A ROA of 5% or above is considered good, and a ROA of 20% or higher is considered excellent.<\/p><\/div>\n\n\n\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-be996c35\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>What is ROA, and why is it important?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">Return on Assets (ROA) measures a company&#8217;s profitability against its assets and resources. Investors can use this metric to identify promising stocks. However, a company\u2019s ROA should only be compared to its competition within the same sector for better and more accurate results.\u00a0<\/p><\/div>\n\n\n\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-ab7ed4d4\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>What is the difference between ROA and ROCE<\/strong><\/span><\/div><p class=\"uagb-faq-content\">ROA is used to assess the profitability of a company against its total assets. ROCE measures a company\u2019s profitability against the capital employed.\u00a0<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Return on Assets (ROA) is a financial ratio that measures a company&#8217;s profitability against its total assets. It is used by corporate management, analysts, and investors to assess how effectively a company uses its resources and assets to generate profit.<\/p>\n","protected":false},"author":96,"featured_media":10343,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"spay_email":""},"categories":[1],"tags":[],"jetpack_featured_media_url":"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4.png","uagb_featured_image_src":{"full":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4.png",2086,1086,false],"thumbnail":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-150x150.png",150,150,true],"medium":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-300x156.png",300,156,true],"medium_large":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4.png",768,400,false],"large":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-1024x533.png",770,401,true],"1536x1536":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-1536x800.png",1536,800,true],"2048x2048":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-2048x1066.png",2048,1066,true],"authorship-box-avatar":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-150x150.png",150,150,true],"authorship-box-related":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-70x70.png",70,70,true],"post-thumbnail":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-270x180.png",270,180,true],"contentberg-main":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-770x515.png",770,515,true],"contentberg-main-full":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-1170x508.png",1170,508,true],"contentberg-slider-stylish":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-900x515.png",900,515,true],"contentberg-slider-carousel":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-370x370.png",370,370,true],"contentberg-slider-grid-b":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-554x466.png",554,466,true],"contentberg-slider-grid-b-sm":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-306x466.png",306,466,true],"contentberg-slider-bold-sm":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-150x150.png",150,150,true],"contentberg-grid":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-370x245.png",370,245,true],"contentberg-list":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-260x200.png",260,200,true],"contentberg-list-b":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-370x305.png",370,305,true],"contentberg-thumb":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-87x67.png",87,67,true],"contentberg-thumb-alt":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/4-150x150.png",150,150,true]},"uagb_author_info":{"display_name":"Nikitha","author_link":""},"uagb_comment_info":0,"uagb_excerpt":"Return on Assets (ROA) is a financial ratio that measures a company's profitability against its total assets. It is used by corporate management, analysts, and investors to assess how effectively a company uses its resources and assets to generate profit.","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts\/10478"}],"collection":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/users\/96"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/comments?post=10478"}],"version-history":[{"count":6,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts\/10478\/revisions"}],"predecessor-version":[{"id":10515,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts\/10478\/revisions\/10515"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/media\/10343"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/media?parent=10478"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/categories?post=10478"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/tags?post=10478"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}