Finance Principles

Calculator

Return & Profitability Ratios Calculator

See how efficiently a business turns what it owns, or what's invested in it, into profit.

← Read the Return & Profitability Ratios concept page

Return on Assets (ROA)

20.0%

Return on Invested Capital (ROIC)

20.0%

Total invested capital

$500,000

How the math works

ROA  = Net Income / Total Assets                = 20.0%
ROIC = Net Income / (Total Debt + Total Equity)  = 20.0%

ROA and ROIC match here because total assets happen to equal total debt plus total equity — that only holds when every asset is funded by invested capital, with no other liabilities like accounts payable in the mix.