Return on net assets

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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[edit]

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[edit]

References[edit]

  1. ^ Return on Net Assets (RONA)
  2. ^ root (2003-11-26). "Return On Net Assets - RONA". Investopedia. Retrieved 2016-10-10.