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If a company is growing each year in revenues, does it mean they have a positively growing ROA?

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Question added by Sidrah Nadeem , Global Marketing Manager , Hill+Knowlton Strategies
Date Posted: 2015/01/22
Ibrahim Hussein Mayaleh
by Ibrahim Hussein Mayaleh , Sales & Business Consultant and Trainer , Self-employed

ROA (Return On Asset) shows how profitable a company is relative to its total assets. It tells you the earnings that are made from the invested assets (capital). 

The ROA is a percentage that comes from dividing Net Earnings by Total Assets. The higher the ROA is the better as it shows that the company is earning more money on less investment.

I am not really a financial guy, but I know that ROA and also ROE (Return of Equity) increases if the revenue growth each year is between10-20%. But for higher growth they will decrease.

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