Dealing with Taxes in Calculating NOPAT

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Dealing with Taxes in Calculating NOPAT
NOPAT is worked out on Operating Profit (less) Taxes. But it may be noted that the total tax includes the tax payable on non operating income / profit . Therefore calculating NOPAT by reducing the total tax may be wrong. Please comment.

NOPAT = Operating Income x (1-Tax rate)

How to Deal with Taxes in Calculating NOPAT
While calculating NOPAT, we account only account the tax on the operating profit... So first calculate the operating income and then subtract the tax (37% or what so ever).



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