Return on assets is a financial indicator, in English ROA or return on assets. It characterizes the profitability of a company in the context of its assets that generate profits. This takes into account total assets, that is, everything that belongs to the company. Return on assets shows company owners how much return they have on their assets.
Instructions
Step 1
Determine the sales volume for the period you are interested in. The accounting department will provide the necessary data upon request. Depending on the accounting policy of the enterprise, at this step, information on shipments of products or payments received for shipped products may be considered. Use the method you would normally use to determine sales.
Step 2
Determine the cost of products sold. Everything is done by analogy with the 1st step, taking into account the same nuances.
Step 3
Find the operating expenses for the time period in question. In another way, these costs are called fixed costs.
Step 4
Determine the taxes due for the specified time period.
Step 5
Calculate your net income. To do this, subtract the results of the 2nd, 3rd and 4th step from the result of the 1st step. Please note that all indicators must be expressed in the same units of measurement. For example, in thousands of rubles or in millions of rubles.
Step 6
Determine total assets. To do this, refer to the accounting data. Total assets are equal to the sum of the company's total liabilities and equity.
Step 7
Calculate your return on assets. To do this, divide the result of the 5th step by the result of the 6th step.
