Return on Assets (ROA)measures a firm's ability to utilize its assets without regard to the sources of capital that fund those assets. The return on equity can bias the results by the degree to which the company leverages itself (uses debt).

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ROA is calculated as net income divided by total assets, while return on equity (ROE) is calculated as net income divided by total equity. ROE can be biased by the degree of leverage, as it only considers the portion of assets funded by equity, while ROA considers all assets regardless of their funding source.

Return on Assets (ROA)measures a Firm's Ability to Utilize Its