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Companies making best use of its assets: Northern Tier Energy LP (NTI), CBOE Holdings Inc (CBOE), Fastenal Company (FAST)

 

The return on assets ratio, often called the return on total assets, is a profitability ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets. In other words, the return on assets ratio or ROA measures how efficiently a company can manage its assets to produce profits during a period.

Since company assets’ sole purpose is to generate revenues and produce profits, this ratio helps both management and investors see how well the company can convert its investments in assets into profits. You can look at ROA as a return on investment for the company since capital assets are often the biggest investment for most companies. In this case, the company invests money into capital assets and the return is measured in profits.

In short, this ratio measures how profitable a company’s assets are.

This ratio can also be represented as a product of the profit margin and the total asset turnover.

Northern Tier Energy LP (NYSE:NTI) was able to keep return on assets at 28.90% in the trailing twelve month while Reuters data showed that industry’s average stands at 4.82% and sector’s optimum level is 5.40%. The stock, after opening at $26.64, closed at $26.88 by scoring 1.36%. The last session’s volume of 553.94K shares was lower than its average volume of 788.68K shares.

CBOE Holdings, Inc (NASDAQ:CBOE) maintained return on assets for the last twelve months at 53.36%, higher than what Reuters data shows regarding industry’s average. The average of this ratio is 0.62% for the industry and sector’s best figure appears 2.82%. The stock has gained 0.70%, reaching at $71.83 after hovering between $71.32 and $72.00.

In the last 12 months, Fastenal Company (NASDAQ:FAST) generated 21.48% using assets of the company. Reuters provide figures showing that industry’s suggest 9.36% and broadly in sector 4.94% seems favorable. The stock rose 0.65% to the closing price of $40.07. The overall volume in the last trading session was 1.52 million shares.  Its fifty two weeks range was $34.45 – $48.43. The total market capitalization remained at $11.53 billion.