ROA positive

What it measures¶

ROA — return on assets — is the profit a company made in a year divided by everything it owned at the start of that year. Net income is the bottom line of the income statement: what is left of revenue after every cost, interest payment and tax. Total assets is the top line of the balance sheet: cash, buildings, machines, stock, money owed by customers, and the rest.

This check computes net income before extraordinary items ÷ total assets at the start of the year for the latest fiscal year and asks one question: was it above zero? Extraordinary items are rare one-off gains or losses that a company reports apart from its ordinary results; leaving them out keeps a single unusual event from deciding the check.

Why it is on the page¶

It is the simplest test of whether the business made money at all from what it owns. It is the first of the nine checks in Joseph Piotroski's F-score, a published checklist that separated stronger from weaker companies among shares priced low against their balance-sheet equity. It opens the Profitability & returns area.

Thresholds, their source and the population they were fitted on¶

• Source: Piotroski (2000), the check he called F_ROA.
• Fitted on: 14,043 company-years of US companies whose shares were priced low against the equity on their balance sheet, fiscal years 1976–1996. A later study found the same checklist working in markets outside the US after 2000.
• Evidence grade: peer-reviewed and replicated.
• Basis: absolute — the line is zero for every company, whatever its industry.

In the evidence panel the figure sits on a bar split at zero: the part below reads fails, the part above passes.

A worked example¶

Honeywell International, fiscal year 2025, from the statements stored on 25 October 2026: net income of 4,729 million US dollars, divided by total assets of 75,196 million at the end of fiscal 2024, gives 6.3% — above zero, so the check passed. The tile's reason sentence read ROA positive (6.3%) meets > 0, absolute.

NuScale Power, a company developing small nuclear reactors, reported a net loss of 355.8 million US dollars on assets of 544.7 million at the start of the year: −65.3%, so the check failed.

What “No verdict” means here¶

A single check has no verdict word of its own; it is passed, failed, not evaluable or not applicable. This one is not evaluable when the net income of the latest year or the total assets of the year before are not stored — typically for the oldest year a company has on record, which has no year before it. It is then left out of the area's count, never counted as 0% or as a failure, and the missing input is named. If too few of the area's checks can run, the area tile shows No verdict.

What the verdict is and is not¶

A pass says one published figure was above zero in the latest fiscal year. It is not a judgement of whether the return is high enough, it does not compare the company with others, it says nothing about next year, and it is not an instruction to trade the shares. A loss can come from a single heavy year of investment; a profit can come from a sale of assets. The ROA indicator page explains the ratio itself in more depth.