Operating ROA   star content check off when done

\(ROA = \frac{\text{operating income}}{\text{assets}}\)

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\(ROA = \frac{\text{operating income}}{\text{assets}}\)

  • \(ROA\) - operating return on assets
  • \(\text{assets}\) - average total assets
Tips: 

Interpretation, relations, and usage:

  1. the higher the ratio >> the higher the profitability
  2. operating income = gross profit – operating costs
  3. instead of operating income, EBIT can be used (remember: be consistent)