| Net Operating Profit After Tax - NOPAT | |
 A company's potential cash earnings if its capitalization were unleveraged (that is, if it had no debt). NOPAT is frequently used in economic value added (EVA) calculations. Calculated as: NOPAT = Operating Income x (1 - Tax Rate) |
|
 NOPAT is a more accurate look at operating efficiency for leveraged companies. It does not include the tax savings many companies get because they have existing debt. |
|
 All About EVA - Looking for a formula to determine whether a company is creating wealth? Time to learn all about Economic Value Added. Understanding Economic Value Added - Discover the simplicity of this important valuation metric. We reveal its underlying ideas and examine each of its components. In each chapter, we demonstrate and evaluate a key step in calculating these components. |
|
Related Terms
 |