Formula
to calculate net income to assets ratio:
Net
Income to Assets = net profit before taxes / total assets.
Net
income to assets ratio definition and explanation:
The
net income to assets ratio is also referred to as the
return on assets ratio.
The net
income to assets
ratio provides a standard for evaluating how efficiently
financial management employs the average dollar invested
in the firm's assets, whether the dollar came from
investors or creditors.
A low net
income to assets ratio indicates that the earnings are
low for the amount of assets.
The net
income to assets ratio measures how efficiently profits are being
generated from the assets employed.
A low net
income to assets ratio compared to industry averages
indicates inefficient use of business assets.
The net income to assets ratio is included in the RA-150
Expert financial statement ratio analysis spreadsheet,
which provides formulas, definitions, calculation,
charts and explanations of each ratio.
The net income to assets ratio is listed in
our net
income ratios and as return on assets ratio is listed in our profitability
ratios.
Spreadsheets to
calculate ratios (includes formulas, definitions,
explanations and charts):
See list of
ratios our other spreadsheets calculate, define
and explain.
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