Net Operating Assets

Net operating assets refer to the total assets required by a company to carry out its core operations, minus the operating liabilities. It represents the assets that are directly involved in generating revenue, excluding financial assets like investments. Net operating assets are a key component in understanding a company's operating efficiency, as it shows how much capital is dedicated to running the business.

Example

A retail company’s net operating assets include inventory, equipment, and receivables, minus its operating liabilities like accounts payable and short-term obligations.