Investing and Money Glossary, terms and definitions.

Return On Assets (ROA)

The latest 12 months' net income divided by the total assets from the most recent quarter. (The five year data is also given.) This ratio is a measure of a firm's effectiveness in using the assets at hand in generating earnings. Return on assets should be of special interest to investors in bank stocks. In banking, an ROA of 1 percent or better is a standard benchmark of superior performance.