[Anonymous]

Hey,

Does ROI and ROA mean the same thing. I am so confused. ROI is profit on sales times Investment turnover. Investment turnover is Sales by Investment and profit on sales is income by sales. So that means ROI is income by investment. So, when I look at the ROA. ROA is asset turnover by profit on sales. Asset turnover is sales by asset and profit turnover is income by sales. So ROA is income by asset. I am using Becker. The talk about ROI and have a huge figure explaning ROA. Are they actually the same thing. The investment was to buy asset. So asset equals investment. Or it is only the messed up way that I usually think. Thanks

[Anonymous]

This is a true statement that I got out of one of the multiple choice question in Becker.

” When the average age of asset differs susbtaintially across segment of business, the use of ROI may not be appropriate.”

So this definitely means there should be some relation of ROI with asset. If it means the same, then I get that. And all the asset measurement issues like gross asset, net asset, du pont, replacement value and liquidation value would make sense. Please advise….

[tcpa_85]

You are correct! ROI and ROA are the same!

FAR-89; AUD-89; BEC-85; REG-2011

Yaeger/Wiley/Gleim

[Author]

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