chadtap Wrote: ------------------------------------------------------- > Net Operating Profit or Loss after Tax = NOPLAT I just spoke to a professor and all the online sources investopedia, financial dictionary, etc are saying NOPLAT =NOP less adjust taxes
Analysts like to use the approach of FCF for valuation so that any accounting difference across countries may be eliminated. To analyse the effect of dividend imputation, analyst either make no adjustment or adjust the cash flow. i.e. the deducting the adjusted tax from NOP. The AT in NOPLAT here therefore means adjusted tax = income tax provision - tax credit (dividend paid x tax credit on net dividends) and roughly, NOPLAT = Net income + interest expense x (1-t) We may apply NOPLAT to the asset or share valuation in the uncertainty situation of high inflationary environment in EM: We would take the following steps in forecasting real/nominal financial projects for emerging market investment: 1. Forecast real revenue first and then multiply it by EBITDA margin to get real EBITDA. Real invested capital is calculated by estimated by summing change in real WC with NCI. Real EBITA is calculated by adding back real depreciation to real EBITDA. 2. Forecast operating results using the nominal valuation approach 2.1 Restate sales, EBITDA, capital investment in nominal term by using the data in 1 above cum inflationary rate estimates. 2.2 Nom net CI has to be estimated by restating net PPE, depreciation and fixed CI in nominal terms. 2.3 Nominal NOPLAT is calculated accordingly after deducing nominal tax from EBITA. 3. Deducing real taxes (found by discounting tax expense in 2.2) from real EBITA from 1 to get real NOPLAT. 4. Use all data from above to form nominal and real free cash flow forecasts (NOPLAT + Depreciation - FIC - Chg in WC) 5. Real firm value is found by discounting real projected cash flows by real WACC as follows: (1 + NWACC)=(1 + RWACC)(1 + Inflation) While nom firm value is found by discounting nom projected CF by nom WACC. Pls note that the nom WACC is not constant throughout the relevant CF period since inflationary rate fluctuates across time in EM.
Not really his bag.
OK, thank you. my cheekiness about the L being a giveaway was wrong. i assumed the L stood for Leverage(d). but if it stands for Loss, then they would be the same.
Refer to the other thread this one has alot of incorrect info in it and should be ignored.
May be rehashing what was already said up above but didn’t have time to read them all. They are the exact same thing. Nopat = Noplat. Different Authors using different names most likely to get tenured. Same calc’s, just use them synonymously…
Here’s what I read… NOPLAT and NOPAT are different in definition, but usually the same for our (simplified!) CFA problems. NOPLAT = Net Operating Profit less adjusted taxes. i.e. = unlevered net income plus any increase in deferred tax liability = NI + Interest(1-t) + (increase in deferred taxes). NOPAT = Net Operating Profit after tax. I.e. Ebit (1-t) Edit: to write the word liability