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The phrase return on average assets (ROAA) is also used, to emphasize that average assets are used in the above formula. [2] This number tells you what the company can do with what it has, i.e. how many dollars of earnings they derive from each dollar of assets they control. It's a useful number for comparing competing companies in the same ...
The return on net assets (RONA) is a measure of financial performance of a company which takes the use of assets into account. [1] [2] Higher RONA means that the company is using its assets and working capital efficiently and effectively. [3] RONA is used by investors to determine how well management is utilizing assets. [4]
Return on equity (ROE) and return on assets (ROA) determine how efficient a company can be at generating profits. Both formulas that can help investors determine how good a company is at turning a ...
The weighted average return on assets, or WARA, is the collective rates of return on the various types of tangible and intangible assets of a company.. The presumption of a WARA is that each class of a company's asset base (such as manufacturing equipment, contracts, software, brand names, etc.) carries its own rate of return, each unique to the asset's underlying operational risk as well as ...
The strength of a company isn’t just about how much money it makes. Investors also want to know how efficiently a company uses its assets, over a set period of time, based on its size and ...
Investors use the return on assets ratio formula to evaluate a company. The greater a return, the higher valuation investors are likely to provide.
Return on investment (ROI) or return on costs (ROC) is the ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time). A high ROI means the investment's gains compare favorably to its cost.
Fixed asset turnover is a ratio that compares a company’s net sales to the net book value of its fixed assets, which accounts for accumulated depreciation. It highlights how efficiently a ...