Financial ratios & operating efficiency · Core
Return on assets
Also called: ROA
ELI5
Profit divided by average or ending assets under a stated method.
Used in conversation
“Keep return on assets on the dashboard, but show the definition and reporting period beside it.”
Pitch context
You will see “Return on assets” in financial models, budgets, board packs and investor materials when the discussion reaches financial ratios & operating efficiency.
Why it matters: In financial ratios & operating efficiency, different calculation boundaries, periods or accounting treatments can change the number and the decision.
Caution
Calculation, recognition and disclosure can vary by accounting framework, company policy and reporting context.
Sources & evidence · 5
Direct term-level sources and supporting source families.
- IFRS Foundation — IFRS GlossaryDirect source · primary · checked 2026-08-16
- U.S. Bureau of Labor Statistics — Productivity programmeDirect source · primary · checked 2026-08-16
- Financial Accounting Standards Board — FASB Accounting Standards CodificationSupporting source family · primary · checked 2026-08-16
- U.S. Small Business Administration — Break-even pointSupporting source family · primary · checked 2026-08-16
- U.S. Securities and Exchange Commission — Non-GAAP Financial Measures — Compliance and Disclosure InterpretationsSupporting source family · primary · checked 2026-08-16