DEFINITION of 'AfterTax Return On Assets'
A profitability measure that indicates how well a company uses its capital resources to generate income. To calculate aftertax return on assets, divide the company's total aftertax income by the value of its total assets. The resulting figure, multiplied by 100, will be a percentage; the higher the percentage, the more efficiently the company uses its assets.
INVESTOPEDIA EXPLAINS 'AfterTax Return On Assets'
The aftertax return on assets ratio can be helpful in comparing the profitability of differentsized companies because it allows investors to see how efficiently a company works with what it has, regardless of how big the company is. If a company has $20 million in net income and $100 million in total assets, its aftertax return on assets would be 20%. A smaller company might only bring in $5 million after taxes, but if its assets totaled $20 million, it would have a superior aftertax return on assets of 25%.

Return On Equity  ROE
The amount of net income returned as a percentage of shareholders ... 
Cash Return On Assets Ratio
A ratio used to compare a businesses performance among other ... 
Return On Total Assets  ROTA
A ratio that measures a company's earnings before interest and ... 
Return On Assets  ROA
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Profitability Ratios
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Investment Income Ratio
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Markets
ROA And ROE Give Clear Picture Of Corporate Health
Both measure performance, but sometimes they tell a very different story. This is why they’re best used together. 
Investing Basics
How To Evaluate A Company's Balance Sheet
Asset performance shows how what a company owes and owns affects its investment quality. 
Budgeting
Use ROA To Gauge A Company's Profits
Do you rely too heavily on ROE? Consider using return on assets for a more complete picture. 
Fundamental Analysis
What is the difference between operating cash flow and net income?
Learn how net income is an income statement for a certain period of time, while cash flow shows inflows and outflows based on conversion of sales into cash. 
Fundamental Analysis
What is the formula for calculating earnings per share (EPS) in Excel?
Understand the basics of the earnings per share ratio and how this important financial metric is calculated in Excel and used in investment analysis. 
Fundamental Analysis
How do I calculate dividend payout ratio from a balance sheet?
Understand what the dividend payout ratio indicates and learn how it can be calculated using the figures from a company's balance sheet statement. 
Credit & Loans
When is it necessary to get a letter of credit?
Capitalize on assets and negate risks by using a letter of credit. Letters of credit are often requested for buying, selling or trading. 
Fundamental Analysis
Can entities other than banks issue letters of credit?
Obtaining a letter of credit from a nonbank is legally acceptable according to the ICC, but companies tend to prefer to receive them from banks. 
Investing Basics
What is the difference between tangible and intangible assets?
Discover the difference between tangible assets and intangible assets and the types of assets that are in each. Additionally, learn where these are recorded. 
Fundamental Analysis
What is the difference between profitability and profit?
Calculating company profit and profitability are not one and the same, and investors should understand the difference between the two terms.