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What is Return on Net Assets?

Return on Net Assets is a calculation used to determine how well a company performs, relative to its resources.

Return on Net Assets gives investors an idea of how well a company uses its resources to generate profits. Net assets includes not only fixed, tangible assets, but also the net working capital of a business.

Working capital is defined as Current Assets minus the Current Liabilities of the business. The net profits for a period are divided by the net assets to arrive at the Return on Net Assets.

Keywords: current liabilities, current assets, Net Asset Value (NAV), tangible assets, net profits, return on assets (ROA), working capital, net assets,