Net Operating Profit After Tax - NOPAT
What Does Net Operating Profit After Tax - NOPAT Mean?
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)
Investopedia explains Net Operating Profit After Tax - NOPAT
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.
