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RNOA = Net operating profit after tax (NOPAT)/Average net operating assets(NOA)

RNOA = NOPM x NOAT

NOPM = NOPAT/Revenues(sales)

NOAT = Revenues /Average NOA

ROE = Net income/Average stockholders' equity
ROE = Operating return + Nonoperating return

average NNO/average stockholders' equity

ROE – RNOA

nonoperating liabilities - nonoperating assets

current assets/current liabilities

>1 = positive working capital

cash+marketable securities+accounts receivable/current liabilities

ability to meet current liabilities w/o liquidating inventories

everything above your inventories-very liquid assets

= total liabilities/stockholders' equity

1.0 = average

high = less solvency

EBIT/interest expense

higher = less risk of default(can cover debt obligations)

NOPBT - Tax on operating profit

Tax expense + (Pretax net nonoperating expense x statutory tax rate)

operating assets - operating liabilities