iCFO Finsight: What Traditional Return Metrics Missed About Earnings Power
Between 2022 and 2025, several professional service industries showed substantial deterioration in traditional profitability metrics. Return on Sales and Return on Assets both fell sharply across sectors — a pattern consistent with rising labor and overhead costs, pricing pressure, and the normalization of unusually strong post-pandemic conditions.
But a different picture emerges when the same businesses are evaluated using a different lens.
Median Industry Performance: 2022 vs. 2025
| Industry | ROS | ROA | ROAI |
| Engineering Services (541330) | 3.8% → 1.1% | 16.4% → 6.8% | 46.3% → 46.4% |
| Interior Design Services (541410) | 4.1% → 0.8% | 28.5% → 4.8% | 47.0% → 47.7% |
| Industrial Design Services (541420) | 4.4% → 0.9% | 27.3% → 5.1% | 49.7% → 59.3% |
| Computer Systems Design (541512) | 3.1% → 0.8% | 18.2% → 5.0% | 52.4% → 47.0% |
| Public Relations Agencies (541820) | 2.9% → 0.8% | 20.1% → 5.0% | 47.8% → 40.1% |
| Translation & Interpretation (541930) | 3.2% → 1.1% | 16.4% → 6.4% | 48.3% → 56.7% |
The pressure on margins and conventional returns is real. But in four of the six industries above, ROAI held steady or improved — even as ROA and ROS fell sharply. That divergence is the story.
Why ROAI tells a different story
Return on Asset Investment (ROAI), developed by Dr. Robert W. Pricer of the University of Wisconsin–Madison School of Business and co-founder of FINTEL, measures operational earning power by dividing EBIT by Permanent Capital — removing distortions from taxes and financing structures. In increasingly asset-light industries, where balance sheets are shrinking relative to revenue, traditional metrics like ROA can compress dramatically even when underlying earnings power remains intact. Read more about ROAI →
What this means for advisors, CFOs, and investors
Traditional return metrics do not always tell the full economic story — particularly in asset-light, technology-enabled industries where balance-sheet dynamics are shifting faster than operating performance. A business that looks weaker on ROA may be generating the same or better operational earnings relative to what it has actually invested. Benchmarking with ROAI alongside conventional metrics is where that distinction becomes visible.
For advisors and investors, this also reframes the due diligence question: before concluding that a professional services business has deteriorated, it is worth asking which metrics are doing the measuring — and whether those metrics are suited to how the business actually operates today.
Apply this to your industry or clients
You can apply this analysis to your own industry or client base. iCFO benchmarks ROAI, ROS, ROA, and a full suite of financial metrics across 2,500+ industries using firm-level data from 1M+ U.S. private companies — now updated through 2025. During a 14-day free trial, you can run full benchmarks for any NAICS code and compare results directly to your own or your clients’ financial statements.
Source: Analytics by iCFO — analysis of 1M+ U.S. private companies using firm-level financial data, 2021–2025 industry benchmarks.
This analysis is part of the iCFO Finsights series, an ongoing benchmark initiative for advisors, investors, and financial professionals.