# GP Ratio/RONA/Operating Profit Margin

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Registered Posts: 80 Regular contributor ⭐
Hi guys
Please could some one tell me the link of these 3 ratios and also the formula for RONA??
I will be sooooo grateful!!
Thanks

• Registered, Moderator Posts: 2,034 mod
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Op profit margin x Asset Turnover = RONA
Sandy
sandy@sandyhood.com
www.sandyhood.com
• Registered, Moderator Posts: 2,034 mod
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RONA = Operating Profit x 100
RONA = Net Assets
Sandy
sandy@sandyhood.com
www.sandyhood.com
• Registered Posts: 80 Regular contributor ⭐
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Thanks for that sandy, but i am still a bit confused! Could you please explained why these could be linked? I bet you have been asked this hundreds of times so i am really sorry!!!
Thank you
• Registered, Moderator Posts: 2,034 mod
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Write out the formulae under each

When you multiplied fractions at school, did you cancel out if the bottom of one fraction was the same as the top of the other?
Sandy
sandy@sandyhood.com
www.sandyhood.com
• Registered Posts: 80 Regular contributor ⭐
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I went to school 10 years ago!! hehe!! I cant remember what i did last week!!
I have just looked through a text book and it has got:

OP OP −sales−(crossed out)
___ = ____________ x

Fixed & net current assets −sales− (crossed out) Fixed & netcurrent assets

But...I just dont get what its telling me. I am really sorry, stressing out big time for monday.
• Registered Posts: 80 Regular contributor ⭐
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It didnt come out properly
• Registered, Moderator Posts: 2,034 mod
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operating profit x 100 x sales revenue = operating profit x 100
xxxsales revenue xxxxxxxxnet assetsxxxxxxxnet assets
Sandy
sandy@sandyhood.com
www.sandyhood.com
• Registered, Moderator Posts: 2,034 mod
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If you cross out the two sales revenue amounts you have the RONA formula left
Sandy
sandy@sandyhood.com
www.sandyhood.com