I don’t understand what the ROA is saying, the definition is: How much net income assets are generating.
I don’t see how this is true, let’s say I run a towing business and my net income for the year was $200,000 and my assets are worth 2,000,000. The ROA in this case is 10%. But how would you tell that the $200,000 came purely from the utilization of these assets! What if $100,000 came from other services like consulting which has nothing to do with the assets themselves.