In corporate finance, net operating profit after tax (NOPAT) is a financial measure of profitability that gives a clear look at the total earnings of the company and depends on how well the company did its operations. It is a company's after-tax operating profit for all shareholders, investors, and debt holders.
An increment in sales and higher net income does not show how well the company performed its operations. NOPAT shows accurately how well the company does its operations and it represents the operating efficiency of the company by removing the effect of the loan.
Investors and analysts are used NOPAT to measure the precise and accurate profitability of the company and compares results with its history as well as with other companies or competitors.
The formula for calculating NOPAT is as follows:
We can calculate operating income using two different formula,
First formula is, Operating Income = Total Profit - Operating Expense
Where, Total Profit = Total revenue - total cost of goods
And second Formula is, Operating Income = Net Income + Non-Operating Loss - Non-Operating Gain + Interest Expense + Tax
Now we calculate, NOPAT = Operating Income * (1 - Tax Rate)
What can you do with NOPAT Calculator?
- It helps to calculate NOPAT and helps to measure operating efficiency of the company.
- Users can see the accurate value of the NOPAT and operating income and also can see the NOPAT value in words.
- This calculator helps to share your calculations by URL.