Finance:Return on net assets
From HandWiki
The return on net assets (RONA) is a measure of financial performance of a company which takes the use of assets into account.[1][2] Higher RONA means that the company is using its assets and working capital efficiently and effectively.[3] RONA is used by investors to determine how well management is utilizing assets.[4]
Basic formulae
- Return on net assets = net income/ (Fixed assets) + (working capital)
where
- Working capital = (current assets) − (current liabilities)[5]
In a manufacturing sector, this is also calculated as:
- Return on net assets = (plant revenue) − costs/ (net assets)
See also
References
- ↑ "Innovation outposts and the evolution of corporate R&D" (in en-US). The Berkeley Blog. 2015-12-22. http://blogs.berkeley.edu/2015/12/22/innovation-outposts-and-the-evolution-of-corporate-rd/.
- ↑ "Report Highlights Financial Resilience of Small and Mid-Sized Private Institutions" (in en-US). The Council of Independent Colleges. https://www.cic.edu/news-information/independent-newsletter/fall-2017/financial-resilience.
- ↑ Return on Net Assets (RONA)
- ↑ root (2003-11-26). "Return On Net Assets - RONA" (in en-US). Investopedia. http://www.investopedia.com/terms/r/rona.asp.
- ↑ "Intro and Financial Analysis". http://www.ualr.edu/haterry/introand.htm.
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