Return on Assets (ROA)

Return of assets = Profit /(average total assets). If a new item of equipment is revalued down during the year for the first time (Dr revaluation expense (P/L), Cr Equipment), which is incorrect: 'Return on assets' will decrease.  'Earnings' or 'net profit after tax' will decrease.   'Average total assets' will decrease Other comprehensive income (OCI) will decrease.

Select all that applyWhich statements correctly describe return on investment (ROI)? (Choose every correct answer.)Multiple select question.It is sometimes referred to as return on assets (ROA).It is normally calculated using net income as the measure of the return.It is normally calculated using average total assets as the measure of the investment.It is calculated by dividing the average net income by the average total assets.It is calculated by dividing net income earned during the year by the total assets at the end of the year.

compare tangible / intangible assets & define ROE, ROI and ROA

Companies with a low ROA usually have more assets involved in generating profit, while companies with a high ROA have fewer assets

All other things being equal, according to the Du Pont model, if a firm’s Return on Assets (ROA)  has been decreasing but it’s Asset Turnover has been increasing, then its Profit Margin has been:Group of answer choicesIncreasingUnable to determine based on the information givenDecreasingRemaining the same