Do you know the difference between: NOPAT (net operating profit after tax) and NOPLAT (net operating profit less adjusted tax)
yes. There is no difference.
Thank mcpass ! I was wondering…
Yes there is. I don’t have my book in front of me, but I think the CFAI book on Corp. Finance, M&A chapter at the end of the book. NOPLAT is net op. profit less adjusted tax, which is not the same as net op. profit after tax. It has to do with leverage.
no, I just asked my prof for valuation that exact q yesterday and we already had this thread and both sources said no difference.
So, I guess concensus NOPLAT=NOPAT=EBIT*(1-tax) which makes sense because I remember calculation of NOPLAT in Emerging markets section as EBITDA - Dep - Tax = EBIT-tax = EBIT*(1-tax rate)
EBIT - tax does NOT equal EBIT*(1-T)… i’m curious as to whether nopat and noplat are the same. i’m almost certain they aren’t. basically the give away is the L in the middle… when i have time later today, i’m going to google this. don’t have books in front of me. my thought was that it’s a little vague as to what NOPLAT is.
i may be confusing matters here but isn’t NOPLAT used for calculations on a real basis? that is, the taxes are adjusted from a nominal basis. NOPLAT is the nominal version of NOPLAT
i mean NOPAT is the nominal version of NOPLAT
no, and that’s where much of the cinfsion stemmed from, most of the other readings used nopat but the developing markets used the equivalent noplat and applied adjustments based on the inflationary envirnnent. Thus people eroneously associated those adjustments with noplat.
Well it’s simple…if NOPLAT only shows up in EM than forget you ever read it. That’s my plan.
I only know it was in there from a friend, I ripped those pages out.
I was told its because the schweser notes refer to 2 different texts where the authors use different terminology for the same thing. Harris said they are the same and Harris is a God, si I’m not gonna complicate my life and question this.
Hmmm not quite, NOPLAT is EBITA less tax NOPAT is EBIT less tax very often amortization is zero (which is likely for the exam) which means EBIT = EBITA EBITA is used more for companies in developing markets. So they are different things but I’d treat them as the same on the exam.