Return on assets answers the question of how much profit each unit of assets generates. Unlike return on equity, this metric does not depend on how these assets were acquired — through own funds or borrowed funds.
This is why both metrics are considered together. A large gap between high return on equity and low return on assets indicates that shareholder returns are achieved through debt burden rather than business efficiency. Under favorable conditions, this increases profit; under deteriorating conditions, it accelerates losses.
Acceptable levels vary significantly across industries. Retail operates with relatively small assets compared to turnover, while infrastructure and manufacturing companies require large investments, so their return on assets is lower despite the same quality of management.
For banks, the metric is particularly low by nature of their business: their assets consist mainly of issued loans, whose volume far exceeds capital. Comparing a bank with an industrial company by this metric is meaningless; comparison only makes sense within the same sector.