## 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

## Common Mistakes

- 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.