Return on net assets

The return on net assets (RONA) is a measure of financial performance of a company which takes the use of assets into account. Higher RONA means that the company is using its assets and working capital efficiently and effectively.[1] RONA is used by investors to determine how well management is utilizng assets.[2]

Basic formulae

Return on net assets = net income / (Fixed assets + working capital)
where Working capital = (current assets minus current liabilities)

In a manufacturing sector, this is also calculated as:
Return on net assets = (plant revenue - costs) / net assets

See also

References

  1. ↑ Return on Net Assets (RONA)
  2. ↑ root (2003-11-26). "Return On Net Assets - RONA". Investopedia. Retrieved 2016-10-10.
This article is issued from Wikipedia - version of the 10/10/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.