(v6020.00) Return on Net Assets

Profitability ratio that calculates the accounting rate of return on net assets, calculated as follows:

((v1700.00) + (v1420.00)) - ((v3220.00) + (v1410.00)) 
(v2490.00 - v2600.00)

where:

  • (v1700.00) Income After Taxes

  • (v1420.00) Total Interest Expense

  • (v3220.00) Interest Tax Shield

  • (v1410.00) Interest Capitalized

  • (v2490.00) Total Assets

  • (v2660.00) Total Current Liabilities

The exclusion of Total Current Liabilities (v2600) means that RONA (v6020.00) represents the accounting return on longer-term investments.

This ratio has limitations: it is based on historical cost, does not incorporate risk or the time value of money, and can be greatly affected by alternative accounting conventions.