Allocate SoftwareLSE:ALLA ROA % is 23.11% as of May. 2014, which is 547% above its 10-year median of 3.57. The stock has 1 warning sign investors should review.
ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Allocate Software's annualizedNet Income for the quarter that ended in May. 2014 was £8.80 Mil.
Allocate Software's average Total Assets over the quarter that ended in May. 2014 was £38.07 Mil. Therefore, Allocate Software's annualized ROA % for the quarter that ended in May. 2014 was 23.11%.
The historical rank and industry rank for Allocate Software's ROA % or its related term are showing as below:
LSE:ALLA'
s ROA % Range Over the Past 10 Years
Min: -229.43 Med: 3.57 Max: 29
Current: 8.76
During the past 13 years, Allocate Software's highest ROA % was 29.00%. The lowest was -229.43%. And the median was 3.57%.
LSE:ALLA's ROA % is not ranked
in the Software industry.
Industry Median: 1.645
vs LSE:ALLA: 8.76
Allocate Software (LSE:ALLA) 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 two times the semi-annual (May. 2014) net income data. The Revenue data used here is two times the semi-annual (May. 2014) 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.
Allocate Software ROA % Related Terms
Allocate Software ROA % Historical Data
* Premium members only.
The historical data trend for Allocate Software's ROA % can be seen below:
* 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 Software - Application subindustry, Allocate Software'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.
Allocate Software ROA % vs Software Industry
For the Software industry and Technology sector, Allocate Software's ROA % distribution charts can be found below:
* The bar in red indicates where Allocate Software'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 two times the semi-annual (May. 2014) net income data.
ROA % is displayed in the 30-year financial page.
Allocate Software (LSE:ALLA) has a ROA % of 23.11% as of May. 2014. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on Allocate Software and its competitors. This is 547% above median its historical median of 3.57.
Is Allocate Software's ROA % too high?
Allocate Software's current ROA % of 23.11% is 547% above median its 10-year median of 3.57. The Software industry median ROA % is 1.65. Allocate Software's value of 23.11% is 1304.9% above this industry median.
How does Allocate Software's ROA % compare to SREV and ASUR?
Allocate Software's ROA % of 23.11% can be compared against companies in the Software industry. The industry median ROA % is 1.65. Allocate Software's value of 23.11% is 1304.9% above this benchmark. While the company's 10-year median is 3.57 vs. the industry median of 1.65, Allocate Software has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROA % for a Software company?
The median ROA % among Software companies is 1.65, based on 2,882 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. Allocate Software's current ROA % of 23.11% is 1304.9% above the industry median. 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 Allocate Software and its competitors. For the Software industry, the median ROA % is 1.65 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Allocate Software's current ROA % is 23.11%, which is 547% above median its own 10-year median of 3.57. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Allocate Software stock overvalued right now?
Allocate Software (LSE:ALLA) has a current ROA % of 23.11%. The current ROA % is 23.11%, which is 547% above median its 10-year median of 3.57 and 1304.9% above the Software industry median of 1.65. 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 Allocate Software (LSE:ALLA), the current ROA % is 23.11% as of May. 2014. 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.
Allocate Software PLC is engaged in the development, sale and support of workforce management solutions, and the provision of related IT services to major healthcare, defence, government and commercial customers. The business of the company is focused principally on the Healthcare market in addition to Defence. Its segments are Licence, Subscriptions, Support, and Services. Licence and Subscriptions segments represent the sale of non-cancellable software licence agreements and subscriptions associated with that software. Support and Services segments represent the provision of installation, consulting, training and product support. It operates in UK, Europe, USA and Australia.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
LSE:ALLA has been successfully added to your 