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Return on Net Assets Calculator

FINANCE   PERSONAL  
Return on Net Assets Calculator is a tool that helps calculate the return on net assets measure compares net profits to net assets to see how well a company is able to utilize its asset base to create profits
Return On Net Assets:
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Background Information

What does Return on Net Assets mean?
The RONA formula is to add together fixed assets and net working capital, and divide into net after-tax profits. It is best to eliminate unusual items from the calculation, if they are one-time events that can skew the results.
Formula

Return on Net Assets = Net profit ÷ (Fixed assets + Net working capital)

Example

Ms. Lisa has net income of $2,000,000, with extraordinary expense of $500,000. She also has fixed assets of $4,000,000 and net working capital of $1,000,000. After eliminating the extraordinary expenses, the net income figure is $2,500,000. Therefore, Return on Net Assets is-

$2,500,000 Net income ÷ ($4,000,000 Fixed assets + $1,000,000 Net working capital)

  • = 50% Return on net assets
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