Return on Net Assets

Return on Net Assets

Return on Net Assets measures how successfully a company is able to utilise its fixed assets to turn a profit. For companies for which fixed assets lie at the heart of the business such as manufacturing or industrial production, this is an important performance metric. It is calculated simply by adding the value of fixed assets as carried on the balance sheet to net working capital (the latter being the difference between current assets and current liabilities) and dividing the result by net income.

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