How to calculate Return On Assets or ROA? I will take you through two examples of calculating ROA, and then show you what the next steps in your financial analysis can be.

ROA or Return On Assets is defined as Net Income divided by Assets. You find the Net Income number on the income statement or P&L, and the assets number on the balance sheet. Let’s perform the ROA calculation for two well-known American companies from very different industries: telecom company Verizon (NYSE: VZ), and retail company Walmart (NYSE: WMT).

⏱️TIMESTAMPS⏱️
0:00 Introduction
0:11 ROA definition
0:32 Input data for ROA calculation
1:44 ROA analysis
2:17 ROA, ROS and asset turnover
4:27 Analyzing net income in ROA
6:07 Analyzing assets in ROA

Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers training in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!