What is 'Return On Net Assets  RONA'
Return on net assets (RONA) is a measure of financial performance calculated as:
Fixed assets are tangible property used in production, such as real estate and machinery. Net working capital is calculated by taking the company's current assets minus its current liabilities. The higher the return, the better the profit performance for the company. Individually, no single calculation tells the whole story of a company's performance, and Return On Net Assets is just one of many ratios that can be used to evaluate a company's financial health.
BREAKING DOWN 'Return On Net Assets  RONA'
If the purpose of performing the calculation is to generate a longerterm perspective of the company's ability to create value, extraordinary expenses may be added back into the net income figure. For example, if a company had a net income of $10 million but incurred an extraordinary expense of $1 million, the net income figure could be adjusted upward to $11 million. This adjustment would not accurately reflect the company's Return On Net Assets in that year, but might provide an indication of the Return On Net Assets the company could expect in the following year if it did not have to incur any further extraordinary expenses.

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Fundamental Analysis
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Investing Basics
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Entrepreneurship
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Economics
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Personal Finance
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Personal Finance
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Personal Finance
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Investing
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Why is the amount of net tangible assets an important benchmark?
Find out more about net tangible assets, how to calculate net tangible assets and the importance of net tangible assets and ... Read Answer >> 
What are the differences between personal and business tangible net worth?
Understand what the term tangible net worth represents, its significance, and how the calculation of net worth differs for ... Read Answer >> 
How are net tangible assets calculated?
Learn about net tangible assets, what it measures and how to calculate a company net tangible assets using examples. Read Answer >> 
How do you calculate net current assets in Excel?
Learn how to calculate net current assets, or working capital, in Microsoft Excel and how to evaluate the financial health ... Read Answer >> 
How can I find net margin by looking a company's financial statements?
Learn how to calculate a company's net margin using financial statements by dividing the company's net revenues by its net ... Read Answer >> 
What is the fixed asset turnover ratio and why is it important?
Learn about the fixed asset turnover ratio and how this calculation is used to analyze how efficiently a company uses its ... Read Answer >>