Net Operating Profit After Tax
(NOPAT)

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Summary

What is Net Operating Profit After Tax? Description

NOPAT is the Operating Profit (EBIT) minus Taxes. Another word for Net Operating Profit After Tax is Profit after Tax.

Calculation of NOPAT. Formula

Net Sales

- Operating Expenses

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Operating Profit (EBIT)

- Taxes

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Net Operating Profit After Tax (NOPAT)

NOPAT is necessary for calculating Economic Value Added.

NOPAT can be calculated at divisional (Strategic Business Unit) level.

Net Operating Profit After Tax (NOPAT) does NOT take into account the idea that a business must cover both the operating costs AND the capital costs.

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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 tot...

2 comments

Is Depreciation Included in Nopat?
Nopat = EBIT - taxes...
Is depreciation also excluded from NOPAT?...

🔥	NEW What is Operating Expenses? How is operating expenses calculated?... 1 1 comments

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Compare with: DuPont Model | Economic Value Added | EBIT

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