se ROA to determine how much profit is being generated for each dollar your company has in assets. Divide the net profit by net assets, and multiply by 100 to compute the ROA. Find net profit on the income statement, and use the balance sheet to compute net assets by taking total assets minus total liabilities. The higher the ratio, the more efficiently your company is generating profits from its resources. New businesses take time to produce profits and utilize assets, therefore the trend in the figure year-over-year is often considered more important than a single calculation.
