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Return on Assets (ROA)Return on Assets ratio, measures the return achieved on a company's total assets. The return is taken to be the attributable profit (i.e. profit after tax, minority interests and preference dividends, attributable to ordinary shareholders).
Return on Assets is calculated as follows and expressed as a percentage:
= (attributable profit / average total assets) * 100
Note: In some cases ROA is a better measure of profitability than ROE, in that it also takes into account debt funding - besides equity funding. This ratio is particularly relevant for banks which typically have huge assets.
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