ROA lets you compare companies of different sizes. Banks typically earn ROA around 1%, while asset-light software companies can exceed 15%. Compare within an industry.
How to use the Return on Assets Calculator
- Net income
- Total assets at the start
- Total assets at the end
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter net income and total assets at the start and end of the year.
Tips
- Take figures from the same financial statements and the same fiscal year.
- Compare ratios with companies in the same industry, not across industries.
- Use several valuation measures together; no single ratio tells the whole story.
- Market prices change every second – refresh the share price before you rely on a result.
Common mistakes to avoid
- Mixing per-share figures with company totals.
- Using trailing earnings for one company and forward earnings for another.
- Forgetting dilution from options and convertible securities.
Inputs explained
| Field | What to enter |
|---|---|
| Net income | Amount in your currency |
| Total assets at the start | Amount in your currency |
| Total assets at the end | Amount in your currency |
What each result means
- Average total assets = ([Total assets at the start] + [Total assets at the end])÷2
- Return on assets (ROA) = [Net income]÷[Average total assets]×100
Example values
How the main result changes when Net income changes and everything else stays at the example values above:
| Net income | Return on assets (ROA) (%) |
|---|---|
| 3,000,000 | 3 |
| 4,500,000 | 4.5 |
| 6,000,000 | 6 |
| 7,500,000 | 7.5 |
| 9,000,000 | 9 |
| 12,000,000 | 12 |
Formula
ROA = net income ÷ total assets × 100Average assets = (opening + closing assets) ÷ 2Worked example
Inputs — Net income: $6,000,000; Total assets at the start: $95,000,000; Total assets at the end: $105,000,000.
Results — Average total assets = $100,000,000.00; Return on assets (ROA) = 6 %.
Frequently asked questions
What is a good ROA?
Above 5% is often considered good, but it depends heavily on the industry.
How is ROA different from ROE?
ROA uses all assets; ROE uses only shareholders' equity.
Why do banks have low ROA?
They hold huge assets (loans) relative to their profits.
What formula does the Return on Assets Calculator use?
ROA = net income ÷ total assets × 100.