What is Return on Operating Assets?
Return on Operating Assets (ROOA) is a financial metric that evaluates a company's ability to generate profits from its core operating assets. It provides insights into how effectively a company utilizes its assets to produce income from its primary business activities. By focusing on operating assets, ROOA excludes non-operating assets and exceptional items, providing a clearer picture of the company's operational efficiency and profitability.
ROOA is calculated by dividing the net operating income by the average operating assets over a specific period. Net operating income represents the income generated from the company's core operations, excluding non-operating income and expenses. This typically includes revenue from sales, interest income, and other earnings directly related to the company's primary business activities. Operating assets encompass the assets directly involved in generating operating income, such as cash, accounts receivable, and inventory.
How to Calculate Return on Operating Assets?
Return on Operating Assets calculator uses Return on Operating Assets = modulus(Net Income)/Operating Assets to calculate the Return on Operating Assets, The Return on Operating Assets is a financial metric that assesses the efficiency and profitability of a financial institution's core operations relative to its operating assets. Return on Operating Assets is denoted by ROA symbol.
How to calculate Return on Operating Assets using this online calculator? To use this online calculator for Return on Operating Assets, enter Net Income (NI) & Operating Assets (OpA) and hit the calculate button. Here is how the Return on Operating Assets calculation can be explained with given input values -> 0.344828 = modulus(200000)/580000.