Importance of Return on Assets in Investment Decision

Submitted by swati11 • August 28, 2020 blog.finology.in

In the last blog, we understood the need to analyse how a company uses its investments and assets in order to generate profits and provide returns to its investors, through the calculation of Return on Investment. However, as mentioned earlier, ROI is a broader measure and focuses on the returns generated on different types of investments. In order to make a clear and well-informed decision, one must focus on the more detailed and concentrated aspects and understand a company's profitability. The next step towards this will be to understand the return on a company's assets.