How this calculator works
Measure period net income relative to average total assets. Average opening and closing assets when possible so a flow of earnings is matched with the resources used to earn it. Negative income produces a negative return; this net-income definition differs from an operating return on capital.
Formula
ROA = net income / average total assets. Net income = ROA × assets. Assets = net income / ROA.
Worked example
$120,000 income on $1,000,000 average assets gives 12%. A $20,000 loss on $500,000 gives -4%.
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Frequently asked questions
Should I use closing assets?
Average assets usually match a full year of income better. If you use closing assets, label that choice and compare like with like.
Is ROA annualized?
The output is for the period of the supplied income. Quarterly income gives a quarterly return unless you annualize it first.
Can assets be zero?
No. The ratio needs a positive asset base, and a zero return cannot uniquely determine assets from zero income.