NOPAT Calculation

Why dont we add back depreciation to the calculation of NOPAT? Isnt it a cash based calculation hence add back all non cash items such as depreciation?

The depreciation is not added back because it provides an estimate of the capital expenditures required to generate that profit.

No.

:racehorse:

NOPAT is no cash measure, but can be seen as unlevered profit, i.e. profit under the assumption of a fully equity financed company.