<ol>
<li>No. </li>
</ol>

<p>Return on assets = net income/assets.</p>

<p>ROI = an informal term roughly corresponding to return on starting capital, or net income/starting capital. Starting capital is any money invested in the business.</p>

<p>Let's say you take out a 500k mortgage on a home with a 50k downpayment. That means 550k of assets. Net of everything you make a $10000 profit from rental income or whatever.</p>

<p>Your ROA is 10k/550k because even though you don't own the home free and clear, the house is still an asset. </p>

<p>ROI is a more informal term comparing how much you invested versus the return. In this example ROI is 10k/50k because you only paid 50k for the home.</p>

<ol start="2">
<li>ROA uses net income, which means after tax.</li>
</ol>

CC BY-SA 3.0
2016-04-04T02:18:41.693Z
I know to find ROI for some investment or project, but is it possible to find ROI for company from income statement and balance sheet?
Marina Curcic
CC BY-SA 3.0
2016-04-04T02:20:00.153Z
You can find ROI for anything because it isn't a formally defined term. The closest equivalent is return on starting capital, which is not on the balance sheet.
D J Sims
CC BY-SA 3.0
2016-04-04T02:07:22.703Z
2016-04-04T02:21:54.217Z
2016-04-04T02:21:54.217Z
D J Sims
<p>1) Is Return on Investment same as Return on Assets? 
There are so many different definition in books so I am now confused...</p>

<p>2) Is ROA = Profit <strong>before</strong> taxes/Total Assets or Profit <strong>after</strong> taxes/Total Assets</p>

<p>3) I know to find ROI for some investment or project, but is it possible to find ROI for company from income statement and balance sheet?</p>

CC BY-SA 3.0
2016-04-04T12:50:05.777Z
I'm voting to close this question as off-topic because it is an accounting question and not an economics one. While I believe that accounting should be on topic, and have opened up a meta question (http://meta.economics.stackexchange.com/questions/1526/might-accounting-questions-be-on-topic) to change things, it currently is off topic.
BKay
CC BY-SA 3.0
2016-04-05T02:31:45.107Z
assets are something you or somebody else owns, an investment is something where you or somebody else have/has put capital to work (often with an exit strategy and a fixed timeframe). If you go to your bank and ask for a loan they might ask you for your assets as security which is worth more than an investment as security because the equity is at hand and can be easily liquidated
Aurigae
<macroeconomics><microeconomics><accounting>
Return on Assets vs Return on Investment
Marina Curcic
# Return on Assets vs Return on Investment

(Asked by: username_0 on 2016-04-04)

1) Is Return on Investment same as Return on Assets?
There are so many different definition in books so I am now confused...

2) Is ROA = Profit **before** taxes/Total Assets or Profit **after** taxes/Total Assets

3) I know to find ROI for some investment or project, but is it possible to find ROI for company from income statement and balance sheet?

**Tags:** macroeconomics, microeconomics, accounting

> **Comments:**
> **username_1**: I'm voting to close this question as off-topic because it is an accounting question and not an economics one. While I believe that accounting should be on topic, and have opened up a meta question (http://meta.economics.stackexchange.com/questions/1526/might-accounting-questions-be-on-topic) to change things, it currently is off topic.  
> **username_2**: assets are something you or somebody else owns, an investment is something where you or somebody else have/has put capital to work (often with an exit strategy and a fixed timeframe). If you go to your bank and ask for a loan they might ask you for your assets as security which is worth more than an investment as security because the equity is at hand and can be easily liquidated  

---

## 1 answers

### Answer by username_3 on 2016-04-04. Score: 0 | Accepted answer

1. No.

Return on assets = net income/assets.

ROI = an informal term roughly corresponding to return on starting capital, or net income/starting capital. Starting capital is any money invested in the business.

Let's say you take out a 500k mortgage on a home with a 50k downpayment. That means 550k of assets. Net of everything you make a $10000 profit from rental income or whatever.

Your ROA is 10k/550k because even though you don't own the home free and clear, the house is still an asset.

ROI is a more informal term comparing how much you invested versus the return. In this example ROI is 10k/50k because you only paid 50k for the home.

2. ROA uses net income, which means after tax.

> **Comments:**
> **username_0**: I know to find ROI for some investment or project, but is it possible to find ROI for company from income statement and balance sheet?  
> **username_3**: You can find ROI for anything because it isn't a formally defined term. The closest equivalent is return on starting capital, which is not on the balance sheet.  

---

