There are quite a few metrics to measure financial figures related to “operation” (NOA NOPAT NOPLAT … and more?) Can anyone advise an intuitive way to memorize the formula and what are they for please? Thank you
NOPAT and NOPLAT are the same, i think
they equal EBIT*(1-tax)
Please correct me if I’m wrong
Sorry i forgot about this :
NOA = operating assets - operating liabilities
operating assets are all assets except cash and cash equivalents & marketable securities
operating liabilities are all liabilities except debt ( both long term and short tem debt)
NOPAT = NOPLAT after taking into consideration varying factors suchs as; deferred taxes, amortized expenses etc
It’s a measure of the firms “cash income”
Is there a reason why we would be asked NOPLAT on the test, and given a separate formula to calculate? Don’t remember seeing this and I’m scoring very well on corp finance and equity…
Im not sure how they’re going to present it but i’m assuming they’ll make it into one of those “Statement 1 is least correct with regard to:” type questions
Thank you all
I have one further question, for NOA:
on Asset side we remove only cash/cash equivalent/marketable securities, whereas on liability side we remove all debt. What if on asset side we have some loan assets (the company lends)? Maybe it will not appear in the exam like this… just curious
Don’t over complicate it