Return on Assets (ROA) Calculator
Measures how efficiently a company uses its total assets to generate net income.
Calculate ROA
Net income (after tax) in millions of USD
Average of beginning and ending total assets for the period, in millions of USD
Return on Assets
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Not investment advice.
What is ROA?
Return on Assets (ROA) expresses net income as a percentage of average total assets, showing how many cents of profit a company generates for every dollar of assets it holds. A higher ROA indicates more efficient asset use. ROA varies widely by industry — capital-intensive businesses like manufacturers and banks naturally carry lower ROAs than asset-light software or service firms, so cross-industry comparisons require care.
Formula
ROA = (Net Income ÷ Average Total Assets) × 100
Worked Example
Worked example — Microsoft Corp. (MSFT)
FY2024
Step 1 Net income (FY2024): $88,136M
Step 2 Average total assets: ($512,163M + $411,976M) ÷ 2 = $462,070M
Step 3 ROA = $88,136M ÷ $462,070M × 100 = 19.07%
Step 4 → Microsoft earns $0.19 of net income for every $1.00 of assets
Source: Microsoft 10-K FY2024 (2024-07-30)
How to Interpret ROA
< 5
Low — capital-intensive or inefficient asset use
5 – 15
Average — typical for diversified companies
15 – 25
Strong — high asset efficiency
> 25
Exceptional — asset-light business with high margins