Answers the Question
How efficiently are we using our assets to generate money?
Calculator for Return on Total Assets
What Is the Return on Total Assets?
This formula measures how much money is being earned from investments into the assets of a company.
Also known as ROTA
Why Is it Important?
- The value returned will show the profitability of investments that have been made into assets. The lower this number, the more likely that a business function is not operating efficiently.
Formula(s) to Calculate Return on Total Assets
- RETURN ON TOTAL ASSETS = EBIT / TOTAL ASSETS
- Firms that outsource or lease functions that are capital-intensive may show increased returns on total assets, even when the long-term cost structures are inferior.