by Dr Greg Chapman
This is another in the series of posts on Small Business Best Practice Benchmarks.
Return on Assets (ROA) is the ratio of Earnings Before Interest and Tax (EBIT) and Total Assets. This gives an indication on the return on the value of the business’ assets. This excludes any financing effect which is why Interest is added back to earnings.
Dr Greg Chapman is the Director of Empower Business Solutions and The Australian Business Coaching Club and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success and Price: How You Can Charge More Without Losing Sales.