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View Full Version : ROA - Writing off 25% of inventory


uskrxm40
Feb 25, 2008, 12:33 PM
How will writing off 25% of inventory during a poor financial year affect following years ROA ratio?

SeanF138
Feb 26, 2008, 10:08 AM
The equation for ROA=Net Income/Total Assets. So if you write off 25% of your assets this will cause your Total Assets to decrease and cause your ROA to increase.