ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Rolls-Royce Holdings's annualizedNet Income for the quarter that ended in Dec. 2025 was $3,815 Mil.
Rolls-Royce Holdings's average Total Assets over the quarter that ended in Dec. 2025 was $51,252 Mil. Therefore, Rolls-Royce Holdings's annualized ROA % for the quarter that ended in Dec. 2025 was 7.44%.
The historical rank and industry rank for Rolls-Royce Holdings's ROA % or its related term are showing as below:
RYCEF'
s ROA % Range Over the Past 10 Years
Min: -16.85 Med: -1.85 Max: 15.83
Current: 15.68
During the past 13 years, Rolls-Royce Holdings's highest ROA % was 15.83%. The lowest was -16.85%. And the median was -1.85%.
RYCEF's ROA % is ranked better than 95.51% of 356
companies
in the Aerospace & Defense industry
Industry Median: 2.5
vs RYCEF: 15.68
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 (Dec. 2025) net income data. The Revenue data used here is two times the semi-annual (Dec. 2025) 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, Rolls-Royce Holdings'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.
Rolls-Royce Holdings ROA % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Rolls-Royce Holdings's ROA % distribution charts can be found below:
* The bar in red indicates where Rolls-Royce Holdings'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 (Dec. 2025) net income data.
ROA % is displayed in the 30-year financial page.
Rolls-Royce Holdings (RYCEF) has a ROA % of 7.44% as of Dec. 2025. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on Rolls-Royce Holdings and its competitors. According to the industry distribution chart, Rolls-Royce Holdings ranks #16 out of 356 companies in the Aerospace & Defense industry, placing it in the top 4.5%.
Is Rolls-Royce Holdings' ROA % too high?
Rolls-Royce Holdings' current ROA % is 7.44%. The Aerospace & Defense industry median ROA % is 2.50. Rolls-Royce Holdings' value of 7.44% is 197.6% above this industry median. Based on the distribution chart, Rolls-Royce Holdings ranks #16 out of 356 companies in the Aerospace & Defense industry, which is in the top quartile — a strong position relative to peers. Overall, Rolls-Royce Holdings has a GF Score™ of 71/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Rolls-Royce Holdings' ROA % compare to GE and RTX?
According to the Aerospace & Defense industry distribution chart, Rolls-Royce Holdings ranks #16 out of 356 companies for ROA %. This places Rolls-Royce Holdings in the top 5% of its industry — outperforming the majority of peers. The industry median ROA % is 2.50. Rolls-Royce Holdings' value of 7.44% is 197.6% above this benchmark. 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. Rolls-Royce Holdings's current ROA % of 7.44% is 197.6% 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 Rolls-Royce Holdings 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. Rolls-Royce Holdings's current ROA % is 7.44%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Rolls-Royce Holdings stock overvalued right now?
Based on GuruFocus' analysis, Rolls-Royce Holdings (RYCEF) is currently considered Significantly Overvalued. The stock's GF Value™ is $8.27, compared to a current price of $18.00 — trading 117.7% above its estimated fair value. The current ROA % is 7.44% and 197.6% above the Aerospace & Defense industry median of 2.50. Rolls-Royce Holdings' overall GF Score™ is 71/100 with 5 warning signs to review. 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 Rolls-Royce Holdings (RYCEF), the current ROA % is 7.44% as of Dec. 2025. 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.
Is Rolls-Royce Holdings (RYCEF) Overvalued in 2026?
Based on GuruFocus' analysis, Rolls-Royce Holdings stock appears to be overvalued.
The current stock price of $18.00 is trading 117.7% above its estimated GF Value™ of $8.27.
GuruFocus considers Rolls-Royce Holdings to be Significantly Overvalued.
Key valuation signals for RYCEF:
ROA %: 7.44%
GF Value™: $8.27 vs. price of $18.00 (117.7% above fair value)
Industry Position: 197.6% above the Aerospace & Defense median (#16 of 356)
No single metric tells the full story. See the RYCEF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Rolls-Royce operates three core business segments: civil aerospace, power systems, and defense. The civil aerospace segment builds engines powering wide-body aircraft, regional and business jets, and offers aftermarket services. Twenty years ago, the firm pioneered full-service flight hour contracts with the TotalCare package. Power systems provides power solutions to multiple end markets (defense, agriculture, marine, and power generation) while the defense business provides military, ground vehicle and naval propulsion solutions.
71GF Score
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