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The return on assets ( ROA ) ratio is calculated by dividing net income by total assets and multiplying by 1 0 0 to get

The return on assets (ROA) ratio is calculated by dividing net income by total assets and multiplying by 100 to get a percentage. This ratio indicates how efficiently a company is using its assets to generate profit. A higher ROA signifies better asset utilization and management efficiency. ROA is a key performance metric for investors and management, helping them assess the effectiveness of asset use in generating earnings. It also facilitates comparison with industry peers and aids in strategic decision-making.

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