Net Operating Asset

Net Operating Asset

		NOA
Payable (liability)	↑	↓
Inventory	↑	↑
Cash	↑	↓ (*)

(*) Cash is not an operating asset, but is deducted from Total assets to calculate net operating assets.

---

(Question)
Regarding the balance sheet accrual ratio, which of the following, other things equal, would most likely lead to an increase in the ratio for a growing company?

A. Extending the time the firm takes to pay its suppliers.
B. A significant build-up of cash.
C. A build-up of inventory.

---

Answer: C

Net Operating Asset
= Operating Asset - Operating Liabilities
= (Total Asset - Cash&Investment) - (Total Liabilities - Long term debt including current portion)

Net Operating Asset

	Net Operating Asset=	+Total Asset	-Cash&Investment	-Total Liabilities	+LTD incl. current portion
A.	↓		↑	↑
B.	↓		↑
C.	↑	↑