Return on assets

Net profit divided by total assets. It measures how productively the whole asset base is used, without regard to who funded it.

A manufacturer earning ₹615 crore on ₹6,200 crore of assets returns 9.9%.

The measure comes into its own for banks, where the balance sheet is the business. A bank's return on assets above 1% is respectable and above 1.5% is strong, and those thresholds hold across markets because the structure of lending is similar everywhere. The same numbers would be dismal for a software company, which is why the ratio is only ever compared within a sector.

For industrials, return on capital employed usually beats it.