ROA - Two formulas - differences

Swissfox · October 28, 2015, 11:29pm

Hi,

I noticed in the formular that there are two formulas for ROA

-Net income+int. expeses (1-t)/total assets

What is exactly the difference? Do you guys have a specific example of when I have to do use one of these formulas instead of the other one?

Thanks

system · October 28, 2015, 11:39pm

where did you see the second forumla?

S2000magician · October 29, 2015, 1:55am

CFA Institute would have to let you know that they want you to use the second formula; the first is far more common.

Swissfox · October 29, 2015, 4:25pm

Hi,

Thank you for your answer! I found this second formula on the Schweser’s formula sheet.

olajideanuoluwa001 · November 3, 2015, 12:39pm

yea, it looks more like return on asset to me, infact, i think the second formula seems more logical than the first.