Return On Average Assets - ROAA


Return On Average Assets - ROAA
An indicator used to assess the profitability of a firm's assets. It is most often used by banks and other financial institutions as a means to gauge their performance. As return on average assets (ROAA) is calculated at period ends (quarters, years, etc.), it does not reflect all of the highs/lows but is merely an average of the period.

ROAA is calculated by taking net income and dividing by average total assets. The final ratio is expressed as a percentage of total average assets. This metric displays how efficiently a company is utilizing its assets and is also useful to aide comparison among peers in the same industry.


Investment dictionary. . 2012.

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