Return on Total Assets

Return on Total Assets

Return on Total assets (RoTA) is another yardstick of efficiency, one that measures a company’s ability to generate operating profits (EBIT) by sweating its assets. To calculate RoTA, analysts calculate the level of operating profits relative to average total assets (an average of total assets at the start of period in question and total assets at the end of the period in question) to smooth fluctuations over a given accounting period.

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