Schweser says “Note that unlevered net income also equals earnings before interest and taxes multiplied by one minus the tax rate” (Page 157). But isn’t that the formula for NOPAT when calculating economic profit and return on capital? Also, in book two in the back of the book (in the formulas), it says that Return on Purchases is COGS/average purchases. That’s not right, is it? Isn’t it Revenue/average purchases, if I remember my Level 1 correctly? -Richard

Ricardo, CP broke this down a couple weeks ago, you may find this helpful http://www.analystforum.com/phorums/read.php?12,917086