Canada Hello Everyone: Simple Accounting question. Help please. :)

[NabilaM]

Hello everyone.

I was hoping someone could help explain to me how to calculate the Average Operating Asset (I cannot locate a formula or explanation anywhere unfortunately)? I am calculating it for the ROI, Margin, Turnover & Residual Income. Thank you very much!

 

[John Baker]

3 Ways to Calculate Average Operating Assets - wikiHow

Identifying the average operating assets or AOA associated with a company during a specific accounting period is very important to the business process. This type of calculation makes it easier to determine if the business is making...

www.wikihow.com

Note: this is a oversimplification, but it may be useful. In practice, what goes into this makeup is a mixture of all kinds of assumptions, methods of valuation - tax implications Vs current value, and a lot of other inputs. Also, different functions of business - credit applications/ worthiness, industry surveys and other agendas can influence these numbers greatly.