Given EVA = NOPAT - $(WACC), help me understand what NOPAT means. How is this different than net income?

NOPAT = EBIT(1-T) NI = (EBIT-Int-taxes)

Good explanation here:

NOPAT minus WACC, I used to love saying that out loud randomly.

For some reason, I found thinking of NOPAT as EBI (as in EBIT less T) worked for me.

Hi, the difference between NOPAT and NOPLAT? NOPAT=net op.profit after taxes NOPLAT =net operating profit less adjusted taxes NOPLAT was introduced towards end of Corp. fin book… Are these actually same? They seem to be conceptually, but i’m wondering why they have two different short names for essentially same thing - what’s the catch… Or is there difference reagarding deferred tax assets/liab (remembering that the corp.fin example involved DTA/DTL)?

there is a difference and it has to do with the deferred taxes. if your taxes plan on reversing then you want to include the deferred taxes in your NOPLAT calculation. if your company plans on continually being able to have a DTA/DTL since they can keep on buying up CAPEX or whatever reason, then you do not want to adjust NOPLAT by your DTA/DTL.

God bless investopedia!

Noplat minus WACC?

I agree with Starbuk