NOPAT
Business & Finance abbreviation · Finance
| Stands for | Net operating profit after tax |
|---|---|
| Categories | Business & Finance |
NOPAT stands for Net operating profit after tax, a finance abbreviation.
Operating profit adjusted for taxes as if the company had no debt, typically calculated as EBIT times one minus the tax rate. It isolates the profit generated by operations from the effect of financing choices.
Example: NOPAT rose 12 percent to $840 million, ahead of the 9 percent growth in invested capital.
Usage notes
NOPAT is the numerator in ROIC and EVA calculations and the starting point for free cash flow to the firm. Pronounced "no-pat." Analysts often adjust it for items such as restructuring charges, operating leases or capitalized R&D to reflect underlying economics.
Related abbreviations
More finance abbreviations
- MAC – Material adverse change
- MBO – Management buyout
- MIRR – Modified internal rate of return
- MOIC – Multiple on invested capital
- MRR – Monthly recurring revenue
- NewCo – New company
- NPV – Net present value
- NTM – Next twelve months
- NWC – Net working capital
- OCF – Operating cash flow
- OpCo – Operating company
- OpEx – Operating expenditure