ROA Please help with it

[pierovic18]

What the is the formula for it:
Net Income / Assets or Net income + Interest (net of taxes) / average assets

 

[JeffJ21]

ni/ta

 

[Rydex]

or Net Profit Margin x Asset Turnover


NI/Sales x Sales/Total Assets

 

[oatmeals2]

Rydex Wrote:
-------------------------------------------------------
> or Net Profit Margin x Asset Turnover
>
>
> NI/Sales x Sales/Total Assets


ROA = Net Income/Total assets

DuPont ROA = ROA x Sales/Sales
= (Net Income/Sales) x (Total assets/Sales)\
= Asset Turnover x Net profit margin


Hope this clarifies it

 

[Rydex]

Oatmeals you are incorrect: Asset Turnover = Sales/Assets

So it equals my original post = NI/sales x sales/total assets

If you know basic math you know that the denominator in net profit margin ie. sales, will cancel out the numerator in the Asset turnover, leaving NI/Assets. This simply breaks ROA apart to determine the main contributor to ROA.

 

[oatmeals2]

Rydex Wrote:
-------------------------------------------------------
> Oatmeals you are incorrect: Asset Turnover =
> Sales/Assets

<snip>


Yeap, my post had an error in it! Thanks for pointing it out

 

[Rydex]

hahahaha, sorry yesterday was a frustrating day, and it always relieves frustration to come down here and beat up on the level 1er's. Sorry man, no hard feelings, you were just in the wrong place at the wrong time.