Return on tangible assets

What is Return on tangible assets?

Return on tangible assets counts as Net income divided by the average of Tangible assets over the last two periods.

Formula:

Net income / Average total tangible assets for two periods

What does Return on tangible assets mean?

It is an indicator of how effectively a company can profit from tangible assets. The indicator may vary significantly, depending on the industry of the company. Therefore, Return on Tangible Assets should not be used to compare companies from different industries.