Return On Assets (ROA)

Formal

A simple percentage comparison between the profits generated by a business and the assets used or utilised to generate that profit. Eg I have £1 Million assets in a business and make £100,000 profits per annum = 10% Return On Assets

Real-world Example

A company earns $400k in net profit on $4M of total assets - an ROA of 10%, showing how efficiently it's using everything it owns, not just its equity or capital employed, to generate profit.