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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.
NOPAT is profits derived from a company's operations after cash taxes but before financing costs and non-cash bookkeeping entries. It is the total pool of profits available to provide a cash return to those who provide capital to the firm.
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.
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.
3 Alternative formula. 4 Uses. ... In financial accounting, free cash flow (FCF) ... OCB t is the firm's net operating profit after taxes (NOPAT) ...
A company's earnings before interest, taxes, depreciation, and amortization (commonly abbreviated EBITDA, [1] pronounced / ˈ iː b ɪ t d ɑː,-b ə-, ˈ ɛ-/ [2]) is a measure of a company's profitability of the operating business only, thus before any effects of indebtedness, state-mandated payments, and costs required to maintain its asset base.
The term finance may incorporate any of the following: ... (finance) Margrabe's formula; ... NOPAT; Free cash flow.
A good operating margin is needed for a company to be able to pay for its fixed costs, such as interest on debt. A higher operating margin means that the company has less financial risk. Operating margin can be considered total revenue from product sales less all costs before adjustment for taxes, dividends to shareholders, and interest on debt.