NOPAT Calculator

Formula

The formula to calculate the Net Operating Profit After Tax (NOPAT) is:

\[ NOPAT = OP \times (1 - R) \]

Where:

$ NOPAT $ is the net operating profit after tax.
$ OP $ is the operating profit.
$ R $ is the tax rate.

What is NOPAT?

NOPAT, or net operating profit after tax, is a financial metric that represents a company’s profitability from its core operations after deducting taxes. It provides a clearer picture of a company’s operating performance by excluding the impact of taxes, helping investors and analysts assess the company’s ability to generate profits from its day-to-day business activities.

Example Calculation

Consider an example where:

Operating Profit (OP): $100,000
Tax Rate (R): 30%

Using the formula to calculate NOPAT:

\[ NOPAT = 100,000 \times (1 - 0.30) = 100,000 \times 0.70 = 70,000 \]

This means that the NOPAT for this example is $70,000.