Return on Assets (ROA) provides an indication of how efficiently a company manages its assets in order to generate earnings. It is calculated by measuring profit against total assets reported.

As a measure, this number tends to be heavily influenced by the requirements of the industry in which the business operates.

Agriculture and manufacturing businesses for example, requiring significant amounts of property, plant and equipment, will typically have a much lower return on assets percentage than a software company.

Return on assets

British American Tobacco Holdings jumped from third to first place on this list, increasing ROA from 22.8 per cent last year to 54.7 per cent -- despite New Zealand making steady progress in reducing smoking rates and tobacco use.


This is explained by an increase in profit after tax of 172 per cent, whereas average total assets have increased by 14 per cent.

The increased profit has been driven by a large gain made on the sale of trademarks and brand names to the entity's related UK company, British American Tobacco.

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Nestle dropped from first place to second this year, decreasing 5.1 per cent to a 28.9 per cent ROA. This is due to a decrease in profit of 10 per cent and an offsetting increase in average total assets of 6 per cent.

Return on equity

Return on Equity measures how effectively a company can generate income relative to the amount of money shareholders have invested in the firm.

It's a useful tool for investors, particularly when comparing firms within the same industry and is calculated by measuring the revenue earned against the average equity held over the past two years -- to prevent changes in shareholder contributions skewing the results.

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For the third year in a row, Nestle topped this category, increasing return on equity to 388.1 per cent -- well ahead of last year's 221.4 per cent, and 2014's 140 per cent result.

This increase is due to average shareholder's equity decreasing by 48 per cent from last year compared to profit after tax which decreased by 10 per cent.

Both McDonald's and Restaurant Brands -- which operates the local KFC, Pizza Hut, Carl's Jr and Starbucks -- turned in strong performances for the fast food sector.

McDonald's return on equity is up from last year's 52.7 per cent to 59.4 per cent. Restaurant Brands dropped slightly from 35.1 per cent last year to 32.8 per cent.

Both of the tobacco companies on the Top 200, British American Tobacco and Imperial Tobacco, continue to generate strong returns for their shareholders -- appearing at second and sixth place respectively on this list this year.