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The phrase return on average assets (ROAA) is also used, to emphasize that average assets are used in the above formula. [2] This number tells you what the company can do with what it has, i.e. how many dollars of earnings they derive from each dollar of assets they control. It's a useful number for comparing competing companies in the same ...
Net Income = Revenue − Expenses. The equation resulting from making these substitutions in the accounting equation may be referred to as the expanded accounting equation, because it yields the breakdown of the equity component of the equation. [5] Assets = Liabilities + Contributed Capital + Revenue − Expenses − Dividends
The most comprehensive formula is: Return on investment (%) = (current value of investment if not exited yet or sold price of investment if exited + income from investment − initial investment and other expenses) / initial investment and other expenses x 100%.
The formula to calculate corporate rate of return on assets is quite simple. All you have to do to calculate it is divide a company’s net income by its total assets.
Operating margin, Operating Income Margin, Operating profit margin or Return on sales (ROS) [9] [10] Operating Income / Net Sales Operating income is the difference between operating revenues and operating expenses, but it is also sometimes used as a synonym for EBIT and operating profit. [ 11 ]
The return on net assets (RONA) is a measure of financial performance of a company which takes the use of assets into account. [1] [2] Higher RONA means that the company is using its assets and working capital efficiently and effectively. [3] RONA is used by investors to determine how well management is utilizing assets. [4]