Assets

Assets refer to financial value of a possession. Possessions in business can be physical in nature such as a vehicle or in the form of paper such as cash or contractual rights. Assets are generally reported in the upper half of a balance sheet.

Return on Assets

Return on Assets

One of the performance ratios used in business identifies the overall ability of management to efficiently utilize resources to generate a profit. Corporate resources include human knowledge/skills and the balance sheet assets of the business. The labor component is unquantifiable in terms of dollars, but assets with a dollar value associated with them are reflected on the balance sheet. The return on assets measures management’s ability to earn a profit  on these balance sheet assets.

Follow by Email
LinkedIn
Share