Return on Assets

What is ROA ?

The ROA expresses the management ability and efficiency in using available resources to get profit.

The ROA is the ratio of the Profit After Tax (Net Income) to Total Assets to indicate the overall profitability of the assets employed.

The ROA indicates the company's ability to re-pay capital employed in the business being profitable. 

ROA = Net Income ➗ Total Assets

The ROA ratio measures in percentage terms the value of the return of total assets employed in the company and that are available to be used by the management of the company. 

The ROA ratio is used as a traditional method in transfer pricing analysis especially for capital-intensive industries.

What is RONA ?

RONA = Net Income➗ Net Assets

What is ROIA ? 

Return on Intangible Assets (ROIA)

ROIA = Net Income➗ Intangible Assets

This ratio express in percentage terms the profitability of the capital invested in the company's intangible assets. 

It is an useful indicator for transfer pricing analysis and therefore for comparisons between companies operating in the same industry, as instance high-tech industry.

It is a significan indicator for start-up companies that bear high costs in research and development for technological process and innovation. 

What is ROTA ? 

Return on Tangible Assets (ROTA)

ROTA is a decomposition coming from the ROA - Return on Assets .

 This indicator is useful in performing financial analysis since its ratio express in percentage terms the profitability of the capital invested in the company's tangible assets. 

Nontheless it is an useful indicator for transfer pricing analysis and therefore for comparisons between companies operating in the same industry, as instance industry with intensive goods and materials, real estate, industrial and manufactoring.  

ROTA = Net Income➗ Tangible Assets