Return on Assets (ROA)
factor.formula
Return on Assets (ROA):
Average Total Assets (AvgTotalAssets):
in:
- :
The net profit of the last 12 months (Trailing Twelve Months) represents the company's profit level in the most recent year. Using TTM can smooth seasonal fluctuations and more accurately reflect the company's continued profitability.
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Average total assets, using the average of the total assets at the beginning and end of the period can more accurately reflect the overall operating conditions of the assets and avoid the deviation that may be caused by using the total assets at a single point in time. The total assets at the beginning of the reporting period (TotalAssets_{Begin}) refers to the total assets at the beginning of the reporting period, and the total assets at the end of the reporting period (TotalAssets_{End}) refers to the total assets at the end of the reporting period.
factor.explanation
Return on total assets (ROA) is an important indicator to measure the profitability of a company, reflecting the company's ability to use all its assets to create profits. A higher ROA usually indicates that the company can effectively use its assets and generate higher profits. When comparing different companies, ROA can help investors evaluate the efficiency of asset utilization of different companies and avoid the situation where the return on net assets (ROE) may be inflated due to high leverage operations, and more truly reflect the company's profitability. This indicator is suitable for analyzing companies in capital-intensive industries and can be used as an important reference indicator for long-term investment.