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Return on assets (ROA)
Strategic perspective
Financial perspective
Key performance question this indicator helps to answer
To what extent are we able to generate profits from the assets we control?
Why is this indicator important?
Companies make investments in assets (such as machinery, equipment, buildings, etc.) in order to generate a return. Companies want to make sure that they maximise the income they generate from the assets they own. Return on assets (ROA) assesses a company’s profitability relative to the assets it controls and is therefore a measure of how efficiently a company is using the assets at its disposal.
If the ROA is low it indicates that the income has been low compared to the amount of assets owned. ROA is a particularly ...
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