Everything looked solid on paper.

The crew at Summit Ridge Roofing was fully booked. Projects were steady. Revenue was growing every year.

But when the owner took a closer look at their Return on Assets (ROA), the story changed.

Their ROA, one of the clearest indicators of how efficiently a business converts assets into profit, was just 2.8%.

That’s well below the 10% benchmark for high-performing businesses in construction and trades.

So, what was going on?

Their trucks and equipment were aging and unreliable. Repairs were common. Cash was tied up in unused materials and tools. The business was working hard, but the assets weren’t working hard enough in return.

They made a few key shifts:

Replaced high-maintenance equipment with more efficient models
Sold unused inventory and began renting specialty tools as needed
Shifted focus from low-margin patch jobs to higher-margin roof replacements

Within a year, their ROA rose to 11.5%. That improvement didn’t just make the business more efficient—it unlocked more profit, more flexibility, and more room to grow.

What is ROA and why should you track it?

ROA (Return on Assets) measures how effectively your business is using its assets to generate profit. It’s a simple formula with big implications:

ROA = (Net Income / Total Assets) × 100

Let’s say your company made $75,000 in profit last year and holds $1,200,000 in total assets (vehicles, trailers, equipment, inventory, and so on):

ROA = (75,000 / 1,200,000) × 100 = 6.25%

That’s decent, but there’s still room for improvement.

Why ROA matters for businesses like yours

If your business uses tools, vehicles, or materials to deliver your work, ROA helps you understand whether those assets are truly paying off.

A low ROA can signal:

Cash tied up in equipment or materials that aren’t generating enough return
Project types that use a lot of resources without delivering strong margins
Opportunities to improve operational efficiency and free up working capital

On the flip side, improving your ROA helps your business:

Do more with less
Build profit without necessarily increasing workload
Gain more control over cash flow and long-term growth

Let’s Take a Look at Your Numbers

Not sure where your ROA stands or how to improve it?

We can help. Book a consultation with our expert team, and we’ll walk through your current numbers and highlight where your assets could be working harder for you.

Small adjustments to how you manage equipment, materials, and job focus can unlock real results.