Indicator of how profitable a company is relative to its total assets.
Formula: ROA = Net Income / Total Assets
How to read it: > 5% is solid · > 10% is excellent. Banks typically earn about 1% because they are highly leveraged; capital-intensive utilities 2–4%. Compare only within the same industry.
A foundational metric created by DuPont in the 1920s to evaluate management efficiency in deploying assets to generate income.