Return on assets is often used as a measure of profitability.
Return on assets, or ROA, is a financial metric that evaluates a company's profitability by calculating its net earnings in relation to its total assets. As a professor of finance, I often stress the importance of ROA as it provides valuable insights into a company's financial health and performance. This ratio can be used to compare companies within the same industry and track a company's performance over time. It is a fundamental concept in finance that helps investors make informed decisions and understand a company's ability to generate profit from its assets.
