Quick Definition
Measures the productive ability of all a company's assets.
Earnings to Total Assets Formula
=
Earnings to Total Assets
Explanation of Earnings to Total Assets
The Earnings to Total Assets ratio compares a company's
Earnings Before Income Taxes to its
Total Assets, measuring the productivity of the company's assets.
Importance of Earnings to Total Assets
An increasing Earnings to Total Assets ratio is generally a positive sign, showing the company is producing more earnings with its assets. This ratio can be readily compared to other companies and industry averages to gain a sense of how productive the company really is.
