What is ROI (Return on Investment)? What is ROA (Return on Asset)? How to calculate ROI(Return on Investment)? How to calculate ROA (Return on Asset)?

Return on Investment (ROI) also known as Return on assets (ROA). This is a profitability ratio that helps determine how efficiently a company uses its assets. It is calculated divided to PAT (Profit after Tax) by Total Asset. In other words, ROA or ROI is an efficiency metric explaining how efficiently and effectively a company is using its assets to generate profits.

Formula of ROI (Return on Investment)

ROI = PAT/Total Asset

PAT = Profit after Tax

Total Asset = Current Asset + Non-current Asset (Net of Depericiation)

Example of how to calculate ROI (Return on Investment)