NOPLAT

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NOPLAT = Net Operating Profit Less Adjusted Taxes.

Used in preference to Net Income as it removes the effects of capital structure (debt vs. equity). The Operating Profit is prior to interest and taxes being subtracted, which makes NOPLAT equal NOPAT.

NOPLAT minus the monetary cost of all capital (both equity and debt) equals EVA.

Though an analyst should make thorough adjustments to account for amortization, intertemporal tax differences, taxes on nonoperating income, and other adjustments, sometimes the following simple back-of-the-envelope formula is employed to show de-levered profits by removing the effects of a debt tax shield: