Return on Assets (ROA)

Net income as a percentage of total assets — how efficiently a company generates profit from every dollar of assets it owns or controls.

Return on Assets (ROA) — Net income as a percentage of total assets — how efficiently a company generates profit from every dollar of assets it owns or controls.

Key facts

Category
Profitability
Definition
Net income as a percentage of total assets — how efficiently a company generates profit from every dollar of assets it owns or controls.
Formula
ROA = Net Income / Total Assets
Live example
/research/stock/WMT
Last updated
2026-06-17

Formula

ROA = Net Income / Total Assets

Worked example

Walmart with $15B net income on $250B total assets has ROA of 6% — generating $0.06 in profit per $1 of assets each year.

Interpretive bands

ROA < 3%
Capital-intensive, low-margin (banks, airlines, retailers). ROA is structurally lower here.
ROA 5 – 10%
Solid for most non-financial businesses.
ROA > 10%
Excellent. Typical of asset-light businesses (software, consulting).

How IndexAlpha uses Return on Assets (ROA)

Tracked alongside ROE on the Profitability card. Less affected by leverage than ROE, so useful for comparing differently-financed companies.

See it live

The Return on Assets (ROA) metric shows up on every IndexAlpha research page. See it now on WMT — or research any stock to view its Return on Assets (ROA).

Related terms

Common questions

What is Return on Assets (ROA)?

Net income as a percentage of total assets — how efficiently a company generates profit from every dollar of assets it owns or controls.

How is Return on Assets (ROA) calculated?

ROA = Net Income / Total Assets. Walmart with $15B net income on $250B total assets has ROA of 6% — generating $0.06 in profit per $1 of assets each year.

How does IndexAlpha use Return on Assets (ROA)?

Tracked alongside ROE on the Profitability card. Less affected by leverage than ROE, so useful for comparing differently-financed companies.

Sources