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Topic: Return on assets

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Return On Capital

Return On Capital

Return on investment

Financial ratio

Return On Equity

Corporate finance

PE ratio

Fundamental analysis

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	Gannon On Investing: On Return on Assets
		ROA can tell you a lot even in retail, but comparing two competing retailers on the basis of their ROA numbers may not work out all that well.
		Obviously, the return on assets number is not like the earnings yield or free cash flow yield number in that it does not tell you anything about the investment itself – rather it tells you something about the underlying business.
		Return on assets is independent of price; therefore, to compare it to a Treasury Bond you would have to combine ROA with a price metric like P/B. Actually, I’ve used that very combination as a kind of simple tool to explain value investing and market inefficiencies.
	www.gannononinvesting.com /2006/02/return_on_assets.html (2590 words)

	Return on Assets (ROA) - USES FOR ROA
		Return on assets (ROA) is a financial ratio that shows the percentage of profit that a company earns in relation to its overall resources.
		ROA is known as a profitability or productivity ratio, because it provides information about management's performance in using the assets of the small business to generate income.
		If the ROA and other profitability ratios demonstrate that this is not occurring—particularly once a small business has moved beyond the start-up phase—then the entrepreneur should consider selling the business and reinvesting his or her money elsewhere.
	www.referenceforbusiness.com /small/Qu-Sm/Return-on-Assets-ROA.html (753 words)

	Return on Assets Decreased Glossary Definition: Investor - MSN Money
		A company’s return on assets usually doesn't collapse overnight, so the decrease of at least 20% signaled by this alert means this bad news has been brewing for a while.
		ROA is a particularly effective way of measuring the efficiency of manufacturing companies, but it doesn't always work so well in the service industry, or for companies in which the primary assets are people instead of equipment.
		Comparing return on assets across an industry will still work for cyclical companies as long as they are at approximately the same point in the industry cycle.
	moneycentral.msn.com /investor/alerts/glossary.asp?TermID=48 (502 words)

	Answers and Discussion: ROA and ROE (Site not responding. Last check: 2007-11-03)
		The ratio computes the return provided by the firm’s investment in all of its assets without regard to how they were obtained.
		This rate of return is the total overall return on all assets.
		Thus the numerator is the remaining return to stockholders.
	www.swlearning.com /accounting/students/fsa_ratio_reso2.htm (258 words)

	Small Business Calculators: Return on assets ratio
		The return on assets ratio measures how well a company's management team is doing its job.
		To accommodate for these swings and produce a more accurate ratio, the total assets figure used to calculate the ROA should be an average of a firm's assets at the beginning and end of the statement period.
		A return on assets ratio of 0.06:1 would mean the company is pulling in six cents for each dollar of assets.
	www.bankrate.com /brm/news/biz/bizcalcs/ratioreturn.asp (262 words)

	R Definitions: Campbell R. Harvey's Hypertextual Finance Glossary
		Realigning the proportions of assets in a portfolio as needed.
		Assets that remain after sufficient assets are dedicated to meet all senior debtholders' claims in full.
		Degree of uncertainty of return on an asset.
	www.duke.edu /~charvey/Classes/wpg/bfglosr.htm (8532 words)

	Dairy Excel's 15 Measures, Bulletin 864, Measure 8
		The ROA also represents the opportunity cost of having your assets invested in the dairy business as opposed to investing in another business or other investment opportunity that might generate a higher or lower return.
		Return on assets should be higher than the interest rate on borrowed money.
		Return on assets may be overstated if owner withdrawals are lower than this, perhaps supplemented by off-farm income.
	ohioline.osu.edu /b864/b864_11.html (605 words)

	"Return on total assets" Definition
		"People" businesses, such as advertising agencies, need very few capital assets compared with a manufacturer which typically needs to invest large amounts in plant and equipment.In general, a return of 12% is adequate and a return of 16% or more is considered good.
		Return on total assets - The ratio of earnings available to common stockholders to total assets.
		Return on total assets : the ratio of earnings available to common stockholders to total assets.
	www.level2.ru /dictionary/r/return_on_total_assets.html (181 words)

	Return on Assets Ratio
		The return on assets ratio provides a standard for evaluating how efficiently financial management employs the average dollar invested in the firm's assets, whether the dollar came from investors or creditors.
		The return on assets ratio measures how efficiently profits are being generated from the assets employed.
		The return on assets ratio is included in the RA-150 Expert financial statement ratio analysis spreadsheet, which provides formulas, definitions, calculation, charts and explanations of each ratio.
	www.bizwiz.ca /return_on_assets_ratio.html (225 words)

	"Return on assets (ROA)" Definition
		Determined by dividing net income for the past 12 months by total average assets.
		R.O.A. can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets).
		Return on assets (ROA) : indicator of profitability.
	www.level2.ru /dictionary/r/return_on_assets_roa.html (111 words)

	Measuring Return on Human Assets in Companies
		A necessary pre-requisite of an assessment of a return on human assets is an ability to assess a human asset value.
		Human asset value is a tool which provides managers with new information which can improve decisions on how best to optimise the firm's human assets.
		The fundamental basis of the human asset value is the analysis of the cost of staff turnover - or in micro terms, the cost of replacing an employee.
	www.fpm.com /articles/measur.htm (2702 words)

	Finding the True Cost of Pension Plans
		Because these assets are not the property of the sponsoring business, it is argued that the sponsoring business should not be able to include the return on these assets in the computation of its periodic pension expense (and hence its net income).
		The current treatment of return on assets under SFAS 87 is essentially an averaging process; periodic pension expense is a function of the long-term expected return on pension plan assets.
		In a bull market environment, where actual returns exceed the long-run average, the corresponding criticism would be that businesses are understating their results by using the comparatively low expected return on assets rather than the higher actual return.
	www.nysscpa.org /cpajournal/2004/104/text/p44.htm (1754 words)

	Fool.com: Thinking about ROA (Fool on the Hill) June 21, 1999
		Asset turnover is defined as trailing sales divided by total assets, and net margin is defined as net income divided by sales.
		It's a bimodal equation, and having a company efficiently using its assets is equally as important as achieving high margins.
		Some assets, such as goodwill, are obviously accounting relics and not invested capital, but exactly how to back out other numbers such as "excess cash" is not so clear.
	www.fool.com /EveningNews/foth/1999/foth990621.htm (1118 words)

	Return On Net Assets (Site not responding. Last check: 2007-11-03)
		ROA is being used to scrutinize plants more frequently and is developing into a benchmarking standard.
		Considering that the formula for ROA is basically profits divided by asset valuation, the MandR function impacts both the numerator and the denominator of the calculation.
		The asset valuation is determined not just by the physical presence of the asset, but by its contribution to profits.
	www.mt-online.com /articles/0306_uptime.cfm?pf=1 (501 words)

	Return on assets - Wikipedia, the free encyclopedia
		The Return on Assets (ROA) percentage shows how profitable a company's assets are in generating revenue.
		Return on Assets = (Profit margin) * (Total Asset Turnover)
		Shoestring operations (software companies, job placement firms) will have a high ROA: their required assets are minimal.
	en.wikipedia.org /wiki/Return_on_assets (224 words)

	Return on assets critical for distributors, NTEA report shows
		Of them all, the difference in return on assets (ROA) is most striking.
		The typical participating firm had an ROA of 1.7% based on 2002 fiscal year data.
		Individual sections cover return on investment, merchandising profile, income statement, expenses in relationship to gross margin, balance sheet, financial ratios, asset productivity ratios, growth and cash sufficiency ratios, operating productivity ratios, employee productivity ratios, line of business analysis, market area analysis, trend analysis and a summary of ratio definitions.
	trailer-bodybuilders.com /news/trucks_return_assets_critical/index.html (342 words)

	ecofine - Return on assets (ROA)
		The ROA is a fundamental measure of the efficiency with which a firm manages its assets.
		ROA does not depend upon the way the firm finances its assets
		It is therefore crucial to manage and control these assets efficiently.
	www.ecofine.com /strategy/ROA.htm (392 words)

	Return on capital - Wikipedia, the free encyclopedia
		return on capital, also known as return on invested capital, is a non-GAAP financial measure that quantifies how well a company generates cash flow relative to the capital it has invested in its business.
		It is defined as Net operating profit less adjusted taxes divided by invested capital and is usually expressed as a percentage.
		When the return on capital is greater than the cost of capital (usually measured as the weighted average cost of capital), the company is creating value; when it is less than the cost of capital, value is destroyed.
	en.wikipedia.org /wiki/Financial_return (158 words)

	Return on Equity
		A high return on equity may be a result of a high return on assets, extensive use of debt financing, or a combination of the two.
		In analyzing both return on equity and return on assets, don't forget to consider the effects of inflation on the book value of the assets.
		While your financial statements show all assets at their book value (i.e., original cost minus depreciation), the replacement value of many older assets may be substantially higher than their book value.
	www.uschamber.com /sb/business/P06/P06_7295.asp (357 words)

	CCH Business Owner's Toolkit \| Return on Assets
		Return on assets is the ratio of net income to total assets.
		It is basically a measure of how well your business is using its assets to produce more income.
		A high return on assets can be attributable to a high profit margin, a rapid turnover of assets, or a combination of both.
	www.toolkit.cch.com /text/P06_7285.asp (161 words)

	nexB: Return On Assets
		IT asset management has become more visible as both a problem and an opportunity for enterprises to improve the overall financial and operational performance of physical, financial and contractual assets.
		Higher utilization – Avoid the cost of new assets which are not needed when you increase the utilization of existing assets.
		We tailor our IT asset management services for each client, but they typically combine the design of practical ROA metrics with some more tactical initiatives such as improvements in asset inventory and tracking processes.
	www.nexb.com /nexb-edit/Wiki.jsp?page=ReturnOnAssets (221 words)

	Financial Ratio Analysis - Return on Total Assets Ratio
		The Return on Total Assets Ratio (ROTA) has a similar meaning to ROCE and the method of calculating it is the same, too.
		Interest and tax problems are the senior managers' concern, since they decide how much to borrow and therefore how much interest they ought to pay; senior managers decide on capital investment, too, and they have a big say in how much tax they pay for a year.
		Take a look at other businesses in the database to see how they have done with their ROTA and to see how interest and taxation has had an impact on their results.
	www.bized.co.uk /compfact/ratios/ror5.htm (354 words)

	Ratio - Return on Assets (ROA)
		Indicates what return a company is generating on the firm's investments/assets.
		The basis of this ratio is that if a company is going to start a project they expect to earn a return on it, ROA is the return they would receive.
		Cory's Tequila Co.'s ROA is 14% - very high, this is over double the cost of borrowing (at time of writing).
	www.investopedia.com /university/ratios/roa.asp (187 words)

	Return on Assets - Definition (Site not responding. Last check: 2007-11-03)
		This number tells you "what the company can do with what it's got", ie how many dollars of profits they can achieve for each dollar of assets they control.
		Capital-intensive industries (like railroads and nuclear power plants) will yield a low return on assets, since they have to own such expensive assets to do business.
		(And if they have to pay a lot to maintain these assets, that will cut into the ROA even more, since the maintenance costs will decrease their earnings).
	www.moneychimp.com /glossary/roa.htm (120 words)

	Return On Net Assets - RONA (Site not responding. Last check: 2007-11-03)
		RONA or the Return On Net Assets equals the Net Operating Profit After Tax divided by the sum of cash, the working capital requirement and the fixed assets.
		A strong virtue of using RONA compared to traditional methods for measuring company success is that it also considers the assets a company uses to achieve its output.
		Although Return on Net Assets (RONA) does not explicitly measures capital charges, it does remind managers that there is a cost to acquiring and holding assets.
	www.valuebasedmanagement.net /methods_rona.html (198 words)

	Return on IT Assets
		Business executives working in capital-intensive industries have learned the value of focusing on return on assets.
		We invite you to listen to this teleconference advising how IT executives can achieve the same benefits by focusing on return on IT assets.
		Why business executives focus on return on assets.
	www.gartner.com /teleconferences/asset_146193_75.jsp (99 words)

	Return On Net Assets (RONA)
		RONA or Return On Net Assets is equal to Net Operating Profit After Tax divided by: cash plus the working capital requirement plus the fixed assets.
		A strong virtue of using RONA compared to traditional methods for measuring company success is that RONA also considers the assets which a company uses to achieve its output.
		Although RONA does not explicitly measure capital charges, it does remind managers that there is a cost to acquiring and holding assets.
	www.12manage.com /methods_rona.html (180 words)

	Benchmark your Business (Site not responding. Last check: 2007-11-03)
		The return on assets ratio indicates how effectively the assets of your business are working to generate profit.
		The higher the ratio the greater the return on assets.
		However this has to be balanced against such factors as risk, sustainability and reinvestment in the business through development costs.
	www.anz.com /australia/business/calculator/businessbenchmark/return.asp (232 words)

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