The company for analysis is HSBC Holdings Plc (HSBA-GB). What is the 5 year average Return on Assets (ROA)? Your response must be entered as a numerical value with two decimal place.

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BlackTom AI · Accepted Answer

The task asks for the 5-year average Return on Assets (ROA) for HSBC Holdings Plc (HSBA-GB) and to provide the result as a numerical value with two decimal places.

First, recall the standard definition: ROA for a given year = Net Income / Total Assets. The 5-year average ROA would be computed by taking the ROA for each of the five most recent fiscal years and then averaging those five values. In other words, ROA_5yr_average = (ROA_year1 + ROA_year2 + ROA_year3 + ROA_year4 + ROA_year5) / 5.

Next, confirm the formatting: the response should be a numerical value with two decimal places. For example, a computed average of 0.507 would be presented as 0.51, and 0.493 would be 0.49, depending on rounding rules (typically standard half-up rounding).

Important considerations:
- Ensure you are using consistent fiscal-year data for all five years (e.g., IFRS annual reports or financial statements).
- If annual ROA values are not directly reported, compute each year’s ROA using Net Income (or Profit) after taxes divided by Total Assets (preferably average of beginning and end-of-year assets for that year, depending on the convention used by the data source).
- Confirm whether the data source presents ROA in percentage terms (e.g., 0.51%) or as a decimal (e.g., 0.0051). Since the instruction asks for a numerical value with two decimal places, you should present the decimal form unless the source specifies percentage terms and you convert appropriately.

Applying these steps in practice:
- Retrieve five consecutive annual ROA values for HSBC from the company’s annual reports or a reputable financial data provider.
- If ROA is given as a percentage, convert to a decimal by dividing by 100 (e.g., 0.8% becomes 0.008).
- Average the five values to obtain the 5-year ROA.
- Round the final result to two decimal places as required by the prompt.

If the provided answer is 0.51, that implies an average ROA of 0.51 (in decimal form). Depending on the data source, this could correspond to 0.51% if the values were originally presented as percentages. To validate, you would need to check the exact five-year ROA values and confirm the rounding convention used by your data source.

FINS2618-Capital Markets & Institution - T1 2025

The company for analysis is HSBC Holdings Plc (HSBA-GB). What is the 5 year average Return on Assets (ROA)? Your response must be entered as a numerical value with two decimal place.

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