Net assets employed (NAE) is a crucial financial metric for businesses seeking to assess their financial health. It represents the total value of a company’s assets, net of liabilities, and is considered a measure of its capital efficiency.
NAE is particularly relevant for capital-intensive businesses, as it helps determine how efficiently they are using their assets to generate returns. By maximizing NAE, companies can improve their profitability and overall financial performance. One notable development in the calculation of NAE is the inclusion of intangible assets, such as intellectual property and brand value, which are now recognized as significant contributors to a company’s financial health.