Return on Assets (ROA) Calculator
Measures how efficiently a company uses its total assets to generate net income.
Calculate ROA
ROA Formula
ROA = (Net Income ÷ Average Total Assets) × 100
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.
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