Return on Net Assets (RONA)

Return on Net Assets (RONA) is a financial ratio that measures a company's profitability relative to its net assets. It is calculated by dividing net income by the net assets (total assets minus current liabilities). This ratio indicates how efficiently a company is using its net assets to generate profits. A higher RONA suggests better asset utilization and overall operational efficiency, making it a key metric for evaluating capital-intensive industries.

Example

A company with net income of $5 million and net assets of $50 million has a RONA of 10%, indicating that it generates $0.10 of profit for every dollar of net assets.