Return on assets (ROA) equals . total assets divided by costs of goods sold net profit margin times asset turnover return on investment divided by return on net worth current assets divided by total assets

net profit margin times asset turnover.

Explanation:

Return on assets is a financial ratio that shows to how efficient an entity's management is at using its assets to generate income.

A company's return on assets (ROA) is calculated as the ratio of net income in a given period to the average total assets for the period.  It is further determined as net profit margin times asset turnover.

Given that

Net profit margin = net income/sales

assets turnover = sales/ average total asset

Return on assets = Net profit margin * assets turnover

= net income/sales * sales/ average total asset

=  net income/average total asset