A measure of performance or valuation whereby an entity’s value is assessed focusing on its operating activities and related assets. Net operating assets (NOA) of an entity is equal to the value of all assets directly used in its core operations (i.e., operational or operating assets) minus all operational or operating liabilities:

NOA= operating assets- operating liabilities

This measure gives the net amount of assets available for an entity’s operations.

Differently expressed, net operating assets are calculated using the following formula:

Net operating assets = (total assets – cash and other monetary assets) – (total liabilities – total debt)

The valuation of a company, using NOA, is based on its core (day to day) operations.

Net operating assets (NOA) is an indicator of a company’s financial health and performance. It reflects how effectively a business can utilize, or is utilizing, its core operational resources (assets) to generate profits, while down playing the effect of financing decisions and non-operating activities. This measure provides a direct picture of a company’s economic capabilities.