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. RONA is used by investors to determine how well management is utilizing assets.

Basic formulae

Return on net assets = ⁠net income/ (Fixed assets) + (working capital)⁠

where

Working capital = (current assets) − (current liabilities)

In a manufacturing sector, this is also calculated as:

Return on net assets = ⁠(plant revenue) − costs/ (net assets)⁠

See also

References

  1. ^ "Innovation outposts and the evolution of corporate R&D". The Berkeley Blog. 2015-12-22. Retrieved 2018-01-19.
  2. ^ "Report Highlights Financial Resilience of Small and Mid-Sized Private Institutions". The Council of Independent Colleges. Retrieved 2018-01-19.
  3. ^ Return on Net Assets (RONA)
  4. ^ root (2003-11-26). "Return On Net Assets - RONA". Investopedia. Retrieved 2016-10-10.
  5. ^ "Intro and Financial Analysis". www.ualr.edu. Retrieved 2018-01-19.

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