Financial Glossary: ROTA


en			ru			jp

ROTA

ROTA

Return On Total Assets - ROTA

A ratio that measures a company's Earnings before Interest and taxes (EBIT) against its total net assets. The ratio is considered an indicator of how successfully a company is using its assets to generate Earnings before contractual obligations must be paid.

The greater a company's Earnings in proportion to its assets (and the greater the coefficient from this calculation), the more effectively that company is said to be using its assets.

To calculate ROTA, you must obtain the Net Income figure from a company's income Statement, and then add back Interest and/or taxes that were paid during the year. The resulting number Will reveal the company's EBIT. The EBIT number should then be divided by the company's total net assets (total assets less Depreciation and any allowances for bad debts) to reveal the Earnings that company has generated for each dollar of assets on its books.ROTA measures the efficiency of the overall trading return on the business as a whole.

The basic formula is: ROTA = profit before Debt, Interest and Tax / average total assets.

Posted by Privatebanking.com

Back

Privatebanking.com

Get the attention you always wanted and promote your corporate image and standing by benefiting from our state of the art interactive web presence.

Ascent Limited

Experience The Difference. Ascent Limited provides first class wealth management and family office services. Our private banking team, assembled from a group of highly experienced banking professionals, will provide financial advice tailored to your individual requirements and keep your portfolio in tune with the latest market developments and opportunities.

©	Copyright by PRIVATE BANKING.COM 2002- - All rights reserved.