Return on assets:

Return on assets:

Profitability ratio is measured in terms of the relationship between n

et profits and assets.

ROA can be called as profit-to-asset ratio.

Profit and assets defined in different approaches on the bas

is of purpose and intent of the calculation of ratio.

Net profit may be defined as,

(i) Net profit after taxes,

(ii) Net profit after taxes plus interest,

(iii) Net profit after taxes plus interest minus tax savi

ngs.

Assets may be defined as,

(i) Total assets,

(ii) Fixed assets,

(iii) Tangible assets.