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What do you mean by Return on Assets? What does it indicate?
Return on Assets (ROA) measures the profitability of the investments in a firm. It is an indicator of the profitability of a company to its total assets. It gives an idea about the efficiency of the management in using its assets to generate earnings. A higher ROA is always preferred because the company is earning more money on less investment.
Formula to calculate ROA = (Net Profit/ Assets) X 100
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