Return on Assets (ROA) measures a company's profitability in relation to its assets. This ratio shows how efficient a company is at using its existing assets to generate a profit.

Return on Assets = Net Income / Total Assets

This ratio shows how efficient a company is at using its existing assets to generate a profit. Investors often compare the ROA of competitive companies in the same industry because it's a normalized metric that give visibility into how efficiently a company operates with what it has on hand.