Return on Net Assets Percentage

Return on Net Assets Percentage

This percentage measures economic return in order to determine whether an institution generated or used net assets in a given year.  In a for-profit company this ratio is critical to demonstrate a return on invested capital (net assets).  In a not-for-profit a return is not necessarily anticipated, thus the not-for-profit designation.  Major changes are generally due to major gifts or appropriations for capital investment. 

The numerator for this formula is increase/ (decrease) in net assets, the denominator is net assets at the beginning of the year.  Both are found in the Statement of Revenues, Expenses, and Changes in Net Position.