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What is Critical Review of ROA in Finance Research about?

The article critically reviews the definition of Return on Assets (ROA) in empirical corporate finance research, highlighting the common misuse of net income (PAT) instead of earnings before interest and taxes (EBIT) as the numerator. It analyzes 100 scholarly articles published between 2001 and 2021, revealing that a significant percentage employed the erroneous PAT-based definition, leading to measurement errors in profitability assessments. The authors aim to provide guidelines for accurate ROA calculati

Author

Rahma Wati

Language

EN