Enter the World of Activity-based Costing--Dickeson

Low turnovers of inventories and delayed collection of accounts are misuse of capital resource—wasted opportunity. How shall we pin a dollar value on those donkeys? They're stealing our hay.

Here's my current idea—RONA—Rate of Return on Net Assets. Divide EBITDA (Earnings Before Income Taxes, Depreciation and Amortization) by Net Assets (Assets less Valuation Reserves.) This is our present rate of return on our asset resource.