Question
Reply to this comment ROA (Return on assets) is a rate that measures the net income compared to the total assets. In other words, it
Reply to this comment
ROA (Return on assets) is a rate that measures the net income compared to the total assets. In other words, it shows how much the company is generating for each dollar invested. It is helpful to compare the results of the companies in the market. A company can be very lucrative, but not efficient. It can demand too much investment to obtain that profit.
The ROE (Return on equity) is very similar to ROA, but it includes the debt of the company. It is calculated by dividing the Net Income by the Stakeholder's equity. Since the stakeholder's equity is the total assets minus the debt of the company, this index shows the return compared to the own capital of the company
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started