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Sunday, June 5, 2011

Return on Net Assets (RONA) Ratio Analysis

Definition: Return on Net Assets (RONA) is used to measure the financial performance of a company, calculated by taking the net income and dividing it by the quantity of its fixed assets and net working income. The higher the ratio, the better the performance.

Formula:

Return on net assets = Profit after tax / (Fixed assets + net working capital)
Or,
RONA = Net income / Net assets
(Note: Net

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