Learn · Explainer
Return on assets (ROA)
Net income against everything a company owns, why banks sit at the bottom, and the figure for each company.
The short answer
Return on assets is net income divided by total assets: how much profit a company makes from everything it owns, however those assets are financed. Across the 100 companies here the median is 7.3%. The 11 banks have a median of 1.1%, because a bank's assets are mostly loans and securities funded by deposits.
The formula
ROA = net income ÷ total assets
Total assets are on the first line of totals on the balance sheet. Because assets equal liabilities plus equity, ROA doesn't change when a company borrows to buy back shares, which makes it a useful companion to return on equity.
Why industries differ so much
A bank holds a very large balance sheet relative to its profit: the median ROA of the banks here is 1.1%, against 7.8% for everyone else. Asset-light businesses such as software and payment networks sit at the other end. Utilities, telecoms and manufacturers with large plants fall in between. ROA is most useful for comparing a company with its own past and with similar businesses.
Caveats
- Total assets include goodwill and other intangibles from acquisitions, which can make an acquisitive company's ROA look lower than its operations would suggest.
- Assets are recorded mostly at historical cost, so a company with old, fully depreciated equipment can show a high ROA.
- Large cash balances count as assets and earn little, which pulls ROA down.
Every company
Net income for the latest fiscal year divided by total assets at that year end, from each 10-K, sorted by ROA.
Common questions
How do you calculate return on assets?
Divide a year's net income by total assets, at year end or averaged over the year, and multiply by 100.
Why do banks have low ROA?
Their balance sheets are very large relative to profit, mostly loans and securities funded by deposits. The banks here have a median ROA of 1.1%.
What's the difference between ROA and ROE?
ROA uses total assets, ROE uses shareholders' equity. Debt and buybacks change ROE but not ROA.
Does goodwill affect ROA?
Yes. Goodwill and other acquired intangibles are part of total assets, so they lower ROA for companies that grew by acquisition.
Is a higher ROA always better?
Not on its own. It varies by industry and can be lifted by old, depreciated assets or lowered by large cash balances.
See it side by side
The same figures for two companies at once, each linked to its 10-K:
Disclosures
- Editor holdings
- The editor holds shares of Tesla (TSLA) and SpaceX in a long-term retirement account. The editor holds no position in any other company named on this page. As of Nov 11, 2026.
- Compensation
- Nobody paid for this page. No affiliate links on this page.
- Sources
- Each company's own SEC filings, linked next to each number.
- Last updated
- Nov 9, 2026
General education, the same for every reader. Not a recommendation to buy, sell or hold any security, and it doesn't consider your situation.
More in Learn and Tools · Methodology & Disclosures explains where every number comes from.