Return on Assets %

Return on Assets %

Net Profit before taxation x 100

FA + CA

 

Benchmark: 15%

Net profit (profit before taxation) as a percentage of all assets in use. The higher the ratio the better.

This differs from the return on capital employed ratio because current liabilities (assets held on short term borrowing e.g. trade credit) are not deducted.

This ratio shows what a company’s return on capital employed figure would probably be if there was no trade credit – see trade credit ratios.