top of page

Return on Net Assets (RONA)

Understanding Return on Net Assets (RONA): Measuring Efficiency and Profitability

Return on Net Assets (RONA) is a financial performance metric that measures how efficiently a company uses its net assets to generate profit. It indicates the profitability and operational efficiency of a business by comparing its net income to its net assets. A higher RONA value signifies better asset utilisation and profitability.

RONA = Net Income / Net Assets


Suppose Company GHI has the following financial details:


  • Net Income: $500,000

  • Net Assets (Total Assets - Total Liabilities): $2,500,000


To calculate RONA:


  1. Divide net income by net assets: 500,000 / 2,500,000 = 0.2

A RONA of 20% indicates that Company GHI generates a return of 20 cents for every dollar of net assets. This suggests efficient use of assets in generating profit.

Profitability Ratio

bottom of page