Return on net operating assets ( RNOA = NOPAT/Average NOA) is commonly used to evaluate a companies financial performance. If managers cannot increase NOPAT, they can still increase RNOA by reducing the amount of net operating assets (NOA). Listed below are four operating items that can be effectively managed to reduce operating assets, and/or increase RNOA:
Return on net operating assets ( RNOA = NOPAT/Average NOA) is commonly used to evaluate a companies financial performance. If managers cannot increase NOPAT, they can still increase RNOA by reducing the amount of net operating assets (NOA). Listed below are four operating items that can be effectively managed to reduce operating assets, and/or increase RNOA:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Return on net operating assets ( RNOA =
Listed below are four operating items that can be effectively managed to reduce operating assets, and/or increase RNOA:
- Inventories
Accounts Receivable - Plant, Property, and Equipment (fixed assets)
- Accounts Payable
List and explain ONE action you would take, for EACH operating item above, to increase RNOA and/or reduce net operating assets (NOA). In your response, you should have ONE action item for EACH operating item listed.
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