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Return on Net Worth –  By Prof. Simply Simple ,[object Object],[object Object],[object Object],[object Object]
Return on Net Worth (RONW) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Example… ,[object Object],[object Object],[object Object],[object Object]
Therefore… ,[object Object],[object Object],[object Object],[object Object]
Difference between Return on Capital Employed (ROCE) and Return on Net Worth (RONW)
Example of ROCE… ,[object Object],[object Object],[object Object],[object Object]
So, therefore as an investor you are likely to feel encouraged to invest in A rather than B
But, RONW says… ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
To sum it up… ,[object Object],[object Object],[object Object]
So…. ROCE is an appropriate measure to get an idea of the  overall profitability of the company's operations while  RONW is an appropriate measure for judging the  returns that a shareholder gets on his investment Hence successful investors like Warren Buffet assign more importance to a company’s RONW to understand their investment growth potential
Hope you have now understood the concept of RONW In case of any query please email to hmasurkar@tataamc.com

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Understand Return on Net Worth (RONW) vs Return on Capital Employed (ROCE

  • 1.
  • 2.
  • 3.
  • 4.
  • 5. Difference between Return on Capital Employed (ROCE) and Return on Net Worth (RONW)
  • 6.
  • 7. So, therefore as an investor you are likely to feel encouraged to invest in A rather than B
  • 8.
  • 9.
  • 10. So…. ROCE is an appropriate measure to get an idea of the overall profitability of the company's operations while RONW is an appropriate measure for judging the returns that a shareholder gets on his investment Hence successful investors like Warren Buffet assign more importance to a company’s RONW to understand their investment growth potential
  • 11. Hope you have now understood the concept of RONW In case of any query please email to hmasurkar@tataamc.com