The two components of RNOA, net operating profit margin and NOA turnover, are independent of each other.

Question

Quizplus · Accepted Answer

The two components of Return on Net Operating Assets (RNOA), net operating profit margin and Net Operating Assets (NOA) turnover, are interrelated because both are derived from how efficiently a company uses its assets to generate profit. The net operating profit margin reflects the profitability of operations relative to sales, while NOA turnover indicates how effectively the company uses its net operating assets to generate sales. Changes in one can affect the other, indicating they are not independent.

The Two Components of RNOA, Net Operating Profit Margin and NOA