ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. American Defense Systems's annualizedNet Income for the quarter that ended in Sep. 2012 was $-0.31 Mil.
American Defense Systems's average Total Assets over the quarter that ended in Sep. 2012 was $2.01 Mil. Therefore, American Defense Systems's annualized ROA % for the quarter that ended in Sep. 2012 was -15.35%.
The historical rank and industry rank for American Defense Systems's ROA % or its related term are showing as below:
ADFS's ROA % is not ranked *
in the Aerospace & Defense industry.
Industry Median: 2.5 * Ranked among companies with meaningful ROA % only.
American Defense Systems (OTCPK:ADFS) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is four times the quarterly (Sep. 2012) net income data. The Revenue data used here is four times the quarterly (Sep. 2012) revenue data.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).
Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Aerospace & Defense subindustry, American Defense Systems's ROA %, along with its competitors' market caps and ROA % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
American Defense Systems ROA % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, American Defense Systems's ROA % distribution charts can be found below:
* The bar in red indicates where American Defense Systems's ROA % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data,
the Net Income data used here is four times the quarterly (Sep. 2012) net income data.
ROA % is displayed in the 30-year financial page.
American Defense Systems (ADFS) has a ROA % of -15.35% as of Sep. 2012. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on American Defense Systems and its competitors.
Is American Defense Systems' ROA % too high?
American Defense Systems' current ROA % is -15.35%.
How does American Defense Systems' ROA % compare to ASDN and MKRS?
American Defense Systems' ROA % of -15.35% can be compared against companies in the Aerospace & Defense industry. The industry median ROA % is 2.50. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROA % for an Aerospace & Defense company?
The median ROA % among Aerospace & Defense companies is 2.50, based on 356 companies in the industry. Companies in the top quartile (top 25%) have a ROA % significantly above this median, while those in the bottom quartile fall well below. However, ROA % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROA % mean?
A high ROA % can signal that a stock is expensive relative to its fundamentals. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on American Defense Systems and its competitors. For the Aerospace & Defense industry, the median ROA % is 2.50 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. American Defense Systems's current ROA % is -15.35%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is American Defense Systems stock overvalued right now?
American Defense Systems (ADFS) has a current ROA % of -15.35%. The current ROA % is -15.35%. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROA % calculated?
ROA % is calculated from a company's financial statements. For American Defense Systems (ADFS), the current ROA % is -15.35% as of Sep. 2012. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
American Defense Systems Inc is a defense and security products company engaged in three business areas: customized transparent and opaque armor solutions; architectural hardening and perimeter defense and tactical training products and services. It serves US government agencies, general contractors and other commercial and private entities operating in high-threat locations.
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