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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.
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.
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 ...
APV formula APV = Unlevered NPV of Free Cash Flows and assumed Terminal Value + NPV of Interest Tax Shield and assumed Terminal Value : The discount rate used in the first part is the return on assets or return on equity if unlevered; The discount rate used in the second part is the cost of debt financing by period.
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.
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]