Return on tangible assets (Return on tangibles)
Profit as a percentage of assets after goodwill and intangibles have been removed.
It shows the return on the assets that physically exist, unaffected by what was paid for past acquisitions.
How it is computed here
Net income / (total assets - intangible assets - goodwill) x 100
Measured over the latest complete fiscal year, as filed. Filed under quality. Higher is the stronger reading, other things equal.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Flatters serial acquirers by ignoring the price they paid for the businesses they bought.
- Withheld when tangible assets are zero or negative.
Questions
How is return on tangible assets calculated?
Net income / (total assets - intangible assets - goodwill) x 100. Measured over the latest complete fiscal year, as filed.
What does return on tangible assets tell a value investor?
It shows the return on the assets that physically exist, unaffected by what was paid for past acquisitions.
When does return on tangible assets mislead?
Flatters serial acquirers by ignoring the price they paid for the businesses they bought. Withheld when tangible assets are zero or negative.