How to calculate return on total assets. Return on assets ratio: taking into account all factors of growth and decline of the company in modern conditions

Return on assets- what is it, how to calculate it and why does an accountant need it? You will learn about this from our article.

What does return on assets show?

Profitability is a whole system of indicators that characterize the efficiency of an enterprise. One of these indicators is the return on assets ratio. It is commonly referred to as ROA (short for English return on assets).

This coefficient demonstrates how high the return on funds invested in the organization's property is, what profit each ruble invested in its assets brings to the company.

IN general view The formula for calculating the return on assets can be represented as follows:

ROA = Pr / Ak × 100%,

ROA - return on assets;

Pr - profit (for calculation, they take either net or profit from sales, depending on what profitability the user is interested in);

Ak - the assets of the organization (as a rule, they use average cost assets for the period).

Return on assets is a relative indicator, usually expressed as a percentage.

Types of return on assets

Calculate 3 indicators of return on assets:

• profitability out current assets- let's denote it ROAvn;
• return on current assets — ROAob;
• return on total assets - ROA.

How to calculate the profitability of non-current assets (balance sheet formula)

Non-current assets are the so-called long-term assets that the company uses for a long time - more than 12 months. Such property is reflected in Section I of the balance sheet. These are fixed assets, intangible assets, long-term financial investments, etc.

When calculating the profitability of assets of this category, the denominator should reflect the total for section I - line 1100. Then we will get the profitability of all available non-current assets.

If necessary, you can analyze the profitability of assets of a particular type, such as fixed assets or a group of non-current assets (tangible, intangible, financial). In this case, the formula is substituted with data on the lines that reflect the relevant property.

The easiest way to calculate the average value of assets is to add the figures at the beginning and end of the year and divide the sum by 2.

See balance for more information. .

Profit indicators for the numerator of the return on assets formula should be taken from the report on financial results, known to everyone under form 2:

• sales profit - from line 2200;
• net profit - from line 2400.

Read about form 2: .

The formula for calculating the profitability of current assets

The principle of calculating the profitability of assets of this type is the same. In the numerator of the formula we put the profit we need from the income statement, in the denominator - the average value of the value of current assets. If we consider the profitability of all assets, we take the result of section II of the asset balance (line 1200). If they are interested separate view- information from the corresponding line of the second section.

Why does an accountant need return on assets?

It is generally accepted that, for the most part, the return on assets indicator is of interest to financiers and analysts who evaluate business performance and look for growth reserves. However, it is also important for accountants or tax specialists of companies. The fact is that profitability, including return on assets, is one of the criteria for assessing the risk of falling into the tax audit plan, provided for by Order No. MM-3-06 / 333@ of the Federal Tax Service of Russia dated May 30, 2007. The critical deviation is the deviation of the return on assets of the organization from the industry average by 10% or more.

Unit of measurement:

% (percentage)

Explanation of the essence of the indicator

Profitability (liabilities) of assets (the English analogue of Return on Assets (ROA) - shows the efficiency of using the company's assets to generate profits. A high value of the indicator indicates the good performance of the enterprise. The value can be interpreted as follows: X kopecks were received net profit for every ruble of used assets. It is calculated as the ratio of the received net profit (or net loss) to the average annual amount of assets. Information about the value of assets can be obtained from the balance sheet, and information about the amount of net income can be obtained from the income statement (profit and loss statement).

Standard value:

There is no single normative value indicator. It is necessary to analyze it in dynamics, that is, by comparing the value of different years for the study period. In addition, it is worth comparing the value of the indicator with the values ​​of direct competitors (which have the same size in terms of the amount of assets or income).

The higher the indicator, the more effective the entire management process is, since the indicator of return on assets is formed under the influence of all the company's activities.

The value of the indicator in Russia:

In Russia, the dynamics of the indicator was as follows:

Rice. 1 Change in return on assets during 1995-2017, %

Obviously, the profitability of domestic enterprises has remained extremely low since 2008. The reasons for this are a decrease in prices for a part of export products, a decrease in sales of export products, a weakening of the domestic market, etc.

Notes and corrections

1. The amount of assets can fluctuate significantly throughout the year, therefore, if such information is available, it is necessary to take into account the values ​​at the end of the quarter, month or week.

2. Some authors argue that there is no negative value of profitability, therefore, in the case of a net loss, it is necessary to set zero and separately calculate the loss ratio. This approach is not correct, since there is a concept of negative profitability.

Directions for solving the problem of finding an indicator outside the normative limits

Optimizing the structure of assets will reduce their volume and increase profitability, provided that the volume of generated profit will increase or remain at the previous level.

Considering that the return on assets is formed under the influence of absolutely all internal and external factors, reserves for increasing the indicator can be found in all areas of the company's work. In general, it is necessary to work towards reducing the amount of expenses and increasing income.

Calculation formula:

Return on Assets = Net Profit (Net Loss) / Average Annual Assets * 100% (1)

Average annual assets = Amount of assets at the beginning of the year/2 + Amount of assets at the end of the year/2 (2)

Average annual assets = Sum of asset values ​​at the end of each quarter / 4 (3)

Average annual amount of assets = Sum of asset values ​​at the end of each month / 12 (4)

Average annual assets = Sum of asset values ​​at the end of each week / 51 (5)

Average annual amount of assets = Sum of asset values ​​at the end of each day / 360 (6)

During the year, the amount of assets fluctuates, so formula 3 will give a more accurate result than formula 2. Formula 4 is more accurate than formula 3, etc. The choice of formula depends on the information that is available to the analyst.

Calculation example:

JSC "Web-Innovation-plus"

Unit of measurement: thousand rubles

Return on assets (ROA) is a measure of how an enterprise manages existing assets in order to generate revenue. If the ROA is low, the asset management may be inefficient. A high ROA, on the contrary, indicates the smooth and efficient functioning of the company.

The formula for calculating the profitability of a company's assets

ROA is usually expressed as a percentage. The calculation is made by dividing the net profit for the year by the total value of assets. If, for example, a clothing store had a net income of 1 million and its total asset value was 4 million, then the ROA would be calculated as follows:

1/4 x 100 = 25%

The ROA calculation allows you to see the return on investment and assess whether sufficient revenue is generated from the use of available assets.

ROA management

The head of the enterprise studies the ROA at the end of the year. If the ROA is high, this is a good sign that the company is making the most of its existing assets. Comparing it with other indicators, such as return on investment, it can be concluded that further investment is advisable, since the enterprise is able to use investments with high efficiency.

Learning about low ROA is vital to running a company effectively. If this indicator is consistently low, this may indicate that either management is not effectively using existing assets, or these assets no longer have value. For example, in the case of the same clothing store, it may turn out that you can increase profits by reducing retail space, therefore, such an asset as a large area no longer has value.

Banks and potential investors pay attention to ROA and ROI indicators before making a decision on granting a loan or further investment. If similar companies generate high revenues with similar initial data, then investors may go to them or conclude that management is not effectively managing existing assets.

Increasing gross income

ROA can motivate management to do more effective use assets. Seeing that the revenue is not as high as it should be, managers make appropriate adjustments to the activities of the enterprise. Also, ROA can show what improvements can be made to increase gross income through proper asset management. In any case, this is better than endlessly investing in a company, hoping for the best.

Return on assets is one of the indicators for evaluating business performance. The article contains formulas and examples of calculating ROA for balance sheet and net profit.

What is return on assets

Return on assets (ROA) is a ratio that shows the amount of profit per unit cost of capital. It characterizes the effectiveness of the use of all assets of the enterprise.

Download and get to work:

Taking into account the economic meaning of the return on assets, the formula for calculating has the following form:

Return on assets (ROA) = (Net income + Interest paid) x 100% / Average assets.

Return on assets formula by balance sheet

All necessary data are contained in forms No. 1 and No. 2 of financial statements.

Return on assets = line 2400 OFR / (line 1600 BB + line 1600 BB) / 2,

where line 2400 OFR - net profit for reporting period, reflected in line 2400 of the income statement,

line 1600 BB - the value of assets at the beginning of the period, reflected in line 1600 of the balance sheet;

line 160 0BB - the value of assets at the end of the period, reflected in line 1600 of the balance sheet.

How to Quickly Calculate Return on Assets and Other Key Metrics Using Excel

Download the calculation model in Excel, which will help you quickly calculate and evaluate the change in the profitability of assets and other key indicators economic activity companies. As initial data, only the balance sheet and the income statement will be required.

Calculation example

Calculate the return on assets according to the balance sheet of the Rolling Plant.

Name of indicator
ASSETS
I NON-CURRENT
Intangible assets
fixed assets
Financial investments
Other noncurrent assets
Section 1 Total
II NEGOTIABLE
Financial investments
Cash and cash equivalents
Other negotiable
Total for Section II
BALANCE
LIABILITY
III CAPITAL AND RESERVES Authorized capital
Revaluation results
retained earnings
Total for Section III
IV LONG-TERM LIABILITIES
Borrowed funds
Other liabilities
Total for section IV
V. SHORT-TERM LIABILITIES
Borrowed funds
Other liabilities
Section V total
BALANCE

table 2. Statement of financial results of Metal Rolling Plant JSC for 2016, million rubles

Name of indicator		For 2016	For 2015
Cost of sales
Gross profit (loss)
Selling expenses
Management expenses
Profit (loss) from sales
Income from participation in other organizations
Interest receivable
Percentage to be paid
Other income
other expenses
Profit (loss) before tax
Current income tax
Net income (loss)

Let's calculate the indicator for 2016 (lines 2400, 2330, 1700) / (3,220 + 5,999) x 100% / ((88,813 + 83,295) / 2) = 10.71 (% per annum).

To complete the picture, it is necessary to track the dynamics of change, for which we calculate and compare with the same indicator of return on assets of the previous year: (4,150 + 6,068) * 100% / ((83,295 + 88,438) / 2) = 11.90% per annum.

Additional indicators of return on assets

In the same way, it is possible to determine the effectiveness of not only total amount assets but also separately:

• return on working capital;
• fixed assets;
• equity.

Such a need arises when it is necessary to solve narrower tasks, depending on the needs of management and the specifics of the enterprise.

Conclusion

The possibilities of using the return on assets, especially given the large number of derived indicators and their interrelations, are very wide. It can be used for:

• an objective assessment of the quality of work of the enterprise management, both top and middle managers;
• assessment of the investment attractiveness of the enterprise by shareholders, potential investors and creditors;
• improving the efficiency of distribution of financial resources between dependent companies within holding structures and financial and industrial groups;
• identifying weaknesses and potential for growth within the company;
• as one of the KPIs.

All this makes the return on assets one of the key indicators efficiency for any enterprise along with profitability ratios for sales and equity. Its application allows you to more fully analyze the activities of both the enterprise separately, and objectively compare different companies.

Definition

Return on assets (returnonassets, ROA) - financial ratio, which characterizes the return on the use of all assets of the organization. The ratio shows the organization's ability to generate profit without taking into account the structure of its capital (financial leverage), the quality of asset management. In contrast to the indicator of "own capital", this indicator takes into account all the assets of the organization, not just own funds. Therefore, it is less interesting for investors.

Calculation (formula)

Return on assets is calculated by dividing net profit (usually for the year) by the value of all assets (i.e., the organization's balance sheet):

Return on Assets = Net Income / Assets

The result of the calculation is the amount of net profit from each ruble invested in the assets of the organization. Often, in order to make it clearer, percentage the formula uses multiplication by 100. In this case, the indicator can also be interpreted as "how many kopecks each ruble invested in the assets of the organization brings."

For more accurate calculations, not the value on a specific date is taken as the "Assets" indicator, but the arithmetic average - assets at the beginning of the year plus assets at the end of the year are divided by 2.

The net profit of the organization is taken according to the "Profit and Loss Statement", assets - according to the Balance Sheet.

If the calculation is made not for the year, but for another period, then to obtain a result in a form comparable to the annual one, the formula is used (in particular, in the program "Your Financial Analyst"):

Return on assets \u003d Revenue * (365 / Number of days in the period) / ((Assets at the beginning + Assets at the end) / 2)

Normal value

Return on assets is highly dependent on the industry in which the company operates. For capital-intensive industries (such as railway transport or power industry) this indicator will be lower. For service companies that do not require large capital investments and investment in working capital, the return on assets will be higher.