2 ) Net profit. Profit is the difference between all cash inflows into the company (revenue) and all types of expenses, including mandatory payments, interest payments on loans and taxes.
The basic formula for calculating ROA includes:
Calculation example
Let's look at the method of calculating the return on assets cambodia phone number list using an example. Let's assume that after calculating revenue and income, it turned out that the pottery workshop's net profit for the year was 450,000 rubles.
The company's analysis showed that the size of assets at the beginning of the year was 3,500,000 rubles, and by the end of the year - 4,500,000 rubles. Let's calculate the average assets:
Average assets = (3,500,000 + 4,500,000) / 2 = 4,000,000 rubles
Now, to calculate the financial ratio ROA, let's remember how the formula for the return on assets indicator looks and works:
ROA = Net Profit / Average Assets x 100% = 450,000 / 4,000,000 x 100% = 11.25%
This means that the workshop earned 11 kopecks of profit for every ruble invested in assets.
All initial data for calculating the return on assets ratio is usually taken from the accounting statements of the business after the balance sheet has been assessed. However, the financial documents of large public companies are often publicly available.