China Sunsine Chemicals Holdings

[specuvestor]

Just to add my 2cents worth:

ROA is an approximate measure on how much cashflow an asset/business is able to produce ie ROIC. Higher of course means better productive assets and is also a good measure across peers in same industry to guesstimate management value

Leveraging distorts managment's operational value by hiding behind financial engineering. But OTOH banks are not going to lend you indefinite amount of leverage so leverage is also a guesstimate on credit worthiness and some leverage is inherent in certain industries with high working capital or capex including banks, REITS and trading firms that has low ROA. Without leverage these industries cannot exist. That was why I had argued that OLAM is viable in OLAM thread.

So in general we have to read across how ROA and ROE interacts with ROA being the basis. Obviously with a lower ROA your cost control and margin of error is much more critical.