Return on Assets (ROA)
factor.formula
Return on Assets (ROA):
Average total assets:
in:
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The EBIT (Earnings Before Interest and Taxes) for the last 12 months (rolling) indicates the operating profit of the company before paying interest and taxes. TTM (Trailing Twelve Months) means using the data of the last 12 months to more comprehensively reflect the company's recent operating conditions.
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Average total assets are the arithmetic mean of total assets at the beginning and end of the period. Using average total assets can better reflect the average occupancy of the company's assets during the inspection period and avoid ROA distortion caused by large fluctuations in assets.
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Beginning total assets refer to the total assets of the enterprise at the beginning of the inspection period.
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Total assets at the end of the period refer to the total assets of the enterprise at the end of the review period.
factor.explanation
Return on total assets (ROA) measures a company's ability to generate profits using all its assets. It is a comprehensive indicator that reflects how effectively the company's management uses the resources at its disposal to generate revenue. A high ROA usually means that the company has strong profitability and asset management efficiency. However, when comparing ROA of different companies, it is necessary to consider industry characteristics and differences in asset structure, because the capital intensity and operating model of different industries will affect the reasonable level of ROA. In addition, ROA itself cannot fully reflect the financial health of the company, and it needs to be combined with other financial indicators for comprehensive analysis.