Return on Net Assets (RONA) is most usable at which level?

Return on Net Assets (RONA) is primarily used at the corporate level because it provides a comprehensive view of how efficiently a company is using its net assets to generate profits. This metric is critical for evaluating the overall financial performance of a company, enabling stakeholders and management to assess the effectiveness of asset utilization across the entire organization.

Using RONA at the corporate level allows for the comparison of financial performance against benchmarks or industry standards, offering insights into strategic decisions related to capital investment and allocation. It reflects the aggregate performance and helps in understanding broad trends influencing returns rather than focusing on specific divisions or operations, which may present a more fragmented view of asset efficiency.

While RONA can be applied at the division level or operational level, those contexts may not provide the full picture of corporate performance and may ignore inter-relationship dynamics that exist within the overall business structure. The transactional level would be too granular and would not effectively capture the larger strategic performance indicators that RONA is intended to reflect. Thus, the corporate level is indeed the most appropriate for the application of RONA in assessing and improving overall financial health and strategy.