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How to calculate Return on assets

The Return on assets formula, with plain worked examples you can check yourself.

Return on assets = NI ÷ A × 100

The result is a percentage (%).

Worked examples

NI = 140 · A = 700 · E = 350Return on assets = 20%
NI = 45 · A = 300 · E = 150Return on assets = 15%
NI = 70 · A = 700 · E = 350Return on assets = 10%

How to use it

  1. Write down the values for each letter in the formula.
  2. Do the brackets first, then divide or multiply.
  3. Multiply by 100 to show the answer as a percentage.
  4. Compare the answer with last period or with a competitor to see if it is good or bad.

This formula belongs to Investing & Returns.

Related terms

AssetsDividendBondHedgingArbitrageLeverage

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