This ratio measures in percentage terms the value of the return of total assets employed in the company and that are available to be used by the management of the company.

The  ROA is the ratio of the EBIT (Earning Before Interest and Taxes) to Total Assets to indicate the overall profitability of the assets employed and it expresses the management ability and efficiency in using available resources to get profit. On the otherwords, the ROA indicates the company's ability to re-pay capital employed in the business. 

It is used as a traditional method in transfer pricing analysis especially for capital-intensive industries. 

 

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