Return On Assets

What Does Return On Assets Mean?

Return on Assets (ROA) is a metric that indicates the earnings generated from a specific amount of invested capital.

In the insurance industry, many companies invest the funds they accumulate in assets to enhance overall profitability. These investments contribute to the company’s growth and increase its overall value.

Insuranceopedia Explains Return On Assets

The formula for calculating Return on Assets (ROA) is net income divided by total assets. Insurance companies can use this equation to evaluate the performance of their investments and determine how much return their assets are generating. If the ROA value is too low, it may indicate the need for adjustments to improve investment outcomes.