What are the disadvantages of using ROA?

Oct 28, 2013 ... Commonly used metrics such as return on equity or returns to shareholders are vulnerable to financial engineering, especially through debt ... The advanced model presents the return on equity as: ROA = Profit margin x asset turnover = ROA. ROE = ROA + (ROA – Interest rate) x leverage or ROE = ROA + ( ... Capital Intensity: The capital intensity of an industry plays a crucial role in its typical return on assets (ROA) figures. Industries that require a ... ROA assesses a company's proficiency in deriving profits from its asset base. On the other hand, ROE focuses on how effectively it's utilizing shareholder ... Dec 5, 2024 ... Return on equity (ROE) is net income divided by shareholder equity. Excel can help with the calculation. ROE measures profitability. ©Tokyo Electric Power Company Holdings, Inc. All Rights Reserved. ROA and ROE (Consolidated). 40.0. -60.0. 12.0. 8.0. 4.0. -8.0. -4.0. 0.0. -80.0. -100.0. Total Market Return On Investment, ROI, Return On Equity, ROE, Return On Assets Ratio, Roa, current, historic, averages from 1 Q 2025 to 1 Q 2024. As you can see in the diagram below, the return on equity formula is also a function of a firm's return on assets (ROA) and the amount of financial leverage it ... Jan 5, 2024 ... ROE = Return on Equity = Net Income / Shareholders Equity, ROA = Return on Assets = Net Income / Total assets, ROIC = Return on Invested Capital. Financial Data, Sales Data|Profit Data, Information by Business Segment, Net Assets|Cash Flows, Capital Investment and others, Per Share Data|ROE・ROA・ROIC