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What Is Return on Assets (ROA)?
Return on Assets measures how efficiently a company uses its asset base to generate profit.
ROA = Net Income / Total Assets × 100
ROA Benchmarks by Industry
| Industry | Typical ROA |
|---|---|
| Technology / SaaS | 10–25% |
| Consumer goods | 5–15% |
| Manufacturing | 3–8% |
| Retail | 4–10% |
| Banking / financial | 1–2% |
| Real estate | 1–3% |
The DuPont Decomposition
ROA can be decomposed into two drivers:
ROA = Net Profit Margin × Asset Turnover
This is useful for diagnosis: a low ROA may come from thin margins, slow asset turns, or both. Improving either driver improves ROA.