The higher the RoA, the better, because 
the company is earning more money on less investment. However, when using RoA as a comparative measure, it is always advisable to compare it against a company’s previous year’s RoA figures or the RoA of a company in the same industry. Sheer size of assets doesn’t guarantee efficiency. For instance, if one company has a net income of Rs.2 million and total assets of Rs.10 million, its RoA is 20%; however, if another company earns the same amount, but has total assets of Rs.20 million, it has an RoA of 10%.
For complete IIPM article click here
Source:- IIPM Editorial
Visit also:- IIPM Publication, Business & Economy & Arindam Chaudhuri Initiative
the company is earning more money on less investment. However, when using RoA as a comparative measure, it is always advisable to compare it against a company’s previous year’s RoA figures or the RoA of a company in the same industry. Sheer size of assets doesn’t guarantee efficiency. For instance, if one company has a net income of Rs.2 million and total assets of Rs.10 million, its RoA is 20%; however, if another company earns the same amount, but has total assets of Rs.20 million, it has an RoA of 10%.For complete IIPM article click here
Source:- IIPM Editorial
Visit also:- IIPM Publication, Business & Economy & Arindam Chaudhuri Initiative
