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NOPAT

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Net Operating Profit After Tax

Earnings after tax payments:

Summary of NOPAT. Abstract

 

Formula

 

      Net Sales

-    Operating Expenses

---------------------------------------------------------

      Operating Profit (EBIT)

-    Taxes

---------------------------------------------------------

      Net Operating Profit After Tax

Description

Net Operating Profit After Tax (NOPAT) is the Operating Profit (EBIT) minus Taxes. Another word for NOPAT is Profit after Tax.

 

NOPAT is necessary for calculating Economic Value Added.

NOPAT can be calculated at divisional (Strategic Business Unit) level.

 

NOPAT does NOT take into account the idea that a business must cover both the operating costs AND the capital costs.

 

More valuation methodologies

Category

Financial Value

Traditional

(Residual Income Component)



 

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