answersLogoWhite

0

A company's Return on Assets (ROA) can increase due to higher net income generated from its assets, indicating improved operational efficiency or increased profitability. This might result from cost reductions, enhanced revenue streams, or effective asset utilization. Additionally, if the company reduces its total assets without a corresponding decrease in income, the ROA will also rise. Overall, an increase in ROA reflects a more effective use of the company's resources to generate profit.

User Avatar

AnswerBot

1mo ago

What else can I help you with?

Related Questions

The procedures designed to safeguard a companys assets and ensure efficient and appropriate account data are called?

the procedures designed to safegaurd a companys assets and ensure efficient and appropriate account data are called?


If Total asset increase return on equity increase or decrease?

Increase in total assets generates increase in either one of liablity account or ultimately an equity account.


How to maintain company's return on shareholder's equity with a decline in a net profit margin?

increase the company's total assets.


Return on equity equals return on assets?

When the debt ratio is zero


How do you Compute return on assets if total assets where 500000 dollars and net income was 26000 dollars?

Return on total asset = Net Income / Total Assets return on total assets = 26000 / 500000 * 100 Return on total assets = 5.2%


Return on net operating assets calculation?

How do I calculate the return on operating assets?


Is the return on assets ratio computed by dividing net income by total assets?

Yes it is the formula for calculating return on total assets as follows: Return on total asssets = Net income / total assets * 100


What are the Average Rate of Return ARR?

Average rate of return = Net Income / Average Assets Average assets = (opening assets - closing assets) / 2


Decrease in assets from purchasing companys own stock is what type of element of financial statement?

distributions to owners


Explain how return on assets decline given an increase in net profit margin?

If you look at what Return on Assets is comprised of, Net Profit Margin and the Total Asset Turnover, if the firm is having a very slow turnover, the ROA will be declining if the turnover is greater in magnitude to the NPM.


What does return on assets mean?

Return on assets (or ROA) means how profitable a company is based on their total assets. The ROA is calculated by dividing a companies total earnings by it's total assets. It is often also called return on investment.


Doherty Corporation had net income of 30000 net sales of 1000000 and average total assets of 500000 It's return on total assets is?

Return on total assets = net income / total assets *100 Return on total assets = 30000 / 500000 * 100 = 6%