- 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. Academic. 2012.
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