When Calculating Return on Net Operating Assets Analysts Sometimes Make

question 24

Essay

When calculating return on net operating assets analysts sometimes make adjustments to the net operating asset base used in the denominator or the ratio. Three possible adjustments are listed below. Explain what these adjustments are, and discuss the merits of these adjustments.
Nonoperating asset adjustment.
Intangible asset adjustment.
Accumulated depreciation adjustment

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Definitions:

Birth Rates

The number of live births per thousand individuals in a population per year.

Death Rate

The number of deaths per unit of population in a specific time period, used as an indicator of the health of a population.

Age Intervals

Defined periods or spans of time between specific age milestones used in studies or demographic surveys.

Highly Developed Countries

Nations with advanced economic systems, high standards of living, and well-developed infrastructure as compared to other countries.