Excel 2013 Tutorial - How to Calculate Return on Assets and Return on Equity Step by Step
In this tutorial you will learn
How to Calculate Return on Assets and Return on Equity Step by Step.
Return on assets (ROA) is a measure of how efficiently a business is using its assets to generate income.
To compute ROA, divide the profits for a period of time by the average of the beginning and ending total assets.
Another common profitability measure is return on equity (ROE).
An investor may use ROE to determine whether her investment in the business is being put to good use. As does ROA, ROE divides net profit by the average of a balance sheet item over the same period.