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In corporate finance, net operating profit after tax (NOPAT) is a company's after-tax operating profit for all investors, including shareholders and debt holders. [1] NOPAT is used by analysts and investors as a precise and accurate measurement of profitability to compare a company's financial results across its history and against competitors.
In accounting, as part of financial statements analysis, economic value added is an estimate of a firm's economic profit, or the value created in excess of the required return of the company's shareholders.
Net operating profit less adjusted taxes (NOPLAT) refers to after-tax EBIT adjusted for deferred taxes, or NOPAT + net increase in deferred taxes. [1] It represents the profits generated from a company's core operations after subtracting the income taxes related to the core operations and adding back in taxes that the company had overpaid during the accounting period.
Adjusted present value (APV) is a valuation method introduced in 1974 by Stewart Myers. [1] The idea is to value the project as if it were all equity financed ("unleveraged"), and to then add the present value of the tax shield of debt – and other side effects. [2] Technically, an APV valuation model looks similar to a standard DCF model.
FCFE = FCFF + Net borrowing − Interest*(1−t) Free cash flow can be broken into its expected and unexpected components when evaluating firm performance. This is useful when valuing a firm because there are always unexpected developments in a firm's performance. Being able to factor in unexpected cash flows provides a financial model. [4]
The formula we’re about to share isn’t the actual treasure; it’s only the key. You could call it the “cash flow” formula. Here’s how it goes: Income minus Expenses minus Debt = Cash Flow.
Return on capital (ROC), or return on invested capital (ROIC), is a ratio used in finance, valuation and accounting, as a measure of the profitability and value-creating potential of companies relative to the amount of capital invested by shareholders and other debtholders. [1] It indicates how effective a company is at turning capital into ...
Return on capital employed is an accounting ratio used in finance, valuation, and accounting. It is a useful measure for comparing the relative profitability of companies after taking into account the amount of capital used. [1]