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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.
ROIC = NOPAT / Average Invested Capital There are three main components of this measurement: [2] While ratios such as return on equity and return on assets use net income as the numerator, ROIC uses net operating income after tax (NOPAT), which means that after-tax expenses (income) from financing activities are added back to (deducted from) net income.
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.
Developing a financial projection in Excel from scratch can be time-consuming, and data entry or formula errors will lead to inaccurate results. Learn more by viewing Microsoft's tutorial on ...
Whether you use Microsoft Office Excel, Google Sheets or Apple Numbers, there’s a free spreadsheet for you. These budgeting templates will give you a head start from simple monthly and yearly ...
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.
Valuation formula [ edit ] Using the residual income approach, the value of a company's stock can be calculated as the sum of its book value today (i.e. at time 0 {\displaystyle 0} ) and the present value of its expected future residual income, discounted at the cost of equity, r {\displaystyle r} , resulting in the general formula:
As such, it is an indicator of a company's financial flexibility and is of interest to holders of the company's equity, debt, preferred stock and convertible securities, as well as potential lenders and investors. Free cash flow can be calculated in various ways, depending on audience and available data.