Return on net assets explained

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

where

^[5]

In a manufacturing sector, this is also calculated as:

See also

• Financial ratio

Notes and References

1. News: Innovation outposts and the evolution of corporate R&D. 2015-12-22. The Berkeley Blog. 2018-01-19. en-US.
2. News: Report Highlights Financial Resilience of Small and Mid-Sized Private Institutions. The Council of Independent Colleges. 2018-01-19. en-US.
3. http://www.readyratios.com/reference/profitability/return_on_net_assets_rona.html Return on Net Assets (RONA)
4. News: Return On Net Assets - RONA. root. 2003-11-26. Investopedia. en-US. 2016-10-10.
5. Web site: Intro and Financial Analysis. www.ualr.edu. 2018-01-19.