After-Tax Return On Assets

Definition of 'After-Tax Return On Assets'


A profitability measure that indicates how well a company uses its capital resources to generate income. To calculate after-tax return on assets, divide the company's total after-tax 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 'After-Tax Return On Assets'


The after-tax return on assets ratio can be helpful in comparing the profitability of different-sized 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 after-tax 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 after-tax return on assets of 25%.



comments powered by Disqus
Hot Definitions
  1. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  2. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  3. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  4. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
  5. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
  6. XW

    A symbol used to signify that a security is trading ex-warrant. XW is one of many alphabetic qualifiers that act as a shorthand to tell investors key information about a specific security in a stock quote. These qualifiers should not be confused with ticker symbols, some of which, like qualifiers, are just one or two letters.
Trading Center