Filter by Categories
Accounting
Banking

Financial Analysis




NOPAT Formula


NOPAT, an acronym for net operating profit after tax, is an entity’s after-tax operating income assuming that it had no debt in its capital structure (and hence, no interest expense).

NOPAT is calculated using the following formula:

Net operating profit after taxes (NOPAT)= operating income * (1 – applicable tax rate)

NOPAT= (sales – operating expenses) x (1- [tax expense/ pretax profit])

NOPAT is a measure of profitability that is used for ease of comparability across entities by eliminating the effect of an entity’s capital composition on its profitability. It involves profitability calculation taking into consideration only the core operations and activities, net of taxes.



Tutorials
This section contains quite a vast collection of easy-to-understand explanatory manuals, practical guides, and best practices how-tos covering the main themes of this ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*