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. The higher the RONA is the better it is. Higher RONA means that the company is using its assets and working capital efficiently and effectively.

You should not mix up "Return on net assets" and "Net assets". Net assets or net worth is the company assets minus liabilities.

Formula

Return on net assets = Profit after tax ( also known as net income) / ( Fixed assets + working capital ) 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

• Financial ratio