Return on Net Assets (RONA) -- The Income/Outcome Contextuary

Return on Net Assets (RONA)

Ratio: Operating Income as a percentage of the Net Assets

RONA shows the profit that managers are making as a percentage of the assets given them to manage. Net Assets in this sense means the amount of Assets derived from Equity and long-term debt. Net Assets does not include supplier Accounts Payable (A/P) and other liabilities which the managers have generated themselves. Similarly, Operating Income does not take into account the finance charges and taxes; i.e. the items that managers have no control over.

See also Return On Assets (ROA).

The Income/Outcome^® Contextuary

a visual glossary of corporate finance