This factor belongs to the growth category, but it essentially reflects the changing trend of the company's profitability. In quantitative investment, growth usually refers to the company's ability to continue to grow in all aspects, and the growth of profitability is one of the important driving forces for the company's growth. Compared with the use of growth rate, the use of increments to measure the change of ROA here can reduce the impact of extreme values. Specifically, this factor evaluates the changes in the company's asset utilization efficiency and profitability by calculating the year-on-year increment of the return on total assets in a single quarter.

Return on total assets (ROA) is an important indicator to measure the company's ability to create profits using all assets (including liabilities and owner's equity). Its year-on-year changes in a single quarter can better reflect the changes in the company's operating conditions and management efficiency in the short term. Compared with annual ROA, quarterly ROA is more sensitive to changes in the company's operating conditions and can serve as a more timely early warning signal. This factor is suitable for fundamental analysis and can be used in combination with other profitability, growth or valuation factors to construct a multi-factor model to more comprehensively evaluate the company's investment value. In addition, since the year-on-year changes are considered, the impact of seasonal factors can be eliminated and the company's real operating changes can be more objectively reflected.

In practical application, the following points should be noted:

• Financial data quality: Factor calculation relies on high-quality financial data, and the original financial statements need to be carefully checked to ensure the accuracy of the data.
• Comparison with the same industry: Due to differences in industry characteristics, the ROA levels of companies in different industries may vary greatly. Therefore, when applying, it is advisable to conduct comparative analysis within the same industry.
• Trend analysis: Trend change analysis should be emphasized instead of focusing only on single-period data. Continuous observation of factor change trends can help to more accurately judge changes in the company's operating conditions.
• Combination with other factors: This factor needs to be combined with other factors (such as revenue growth rate, profit growth rate, etc.) for comprehensive analysis in order to more comprehensively evaluate the company's overall growth.