# NOPAT Calculator

If you want to determine the company's operating efficiency, you should know the net operating profit after tax. For this purpose, you can use our NOPAT calculator.

A **company's potential profitability ratio** calculates the **income earned from a company's operations** if it had **no leverage or debt** is called **NOPAT**, also known as** Net Operating Profit After Tax**.

**Table of Contents**

## Formula of NOPAT Calculator

After having the above figures, you can easily find the net operating profit after tax by using our NOPAT calculator or the formula listed below:

NOPAT = operating income × (1 – tax rate)

**Whereas,**

The tax rate is the taxes paid by a company from the percentage of income earned by a company.

**Note:**

To calculate return on assets, you can use our Return On Assets Calculator.

### Explanation of NOPAT Calculator

To determine NOPAT, you must know what is operating income and how to calculate it.

**Operating Income**

The income or profit generated by a company from its core functions (e.g., the goods or services provided by a company) after paying all operating expenses like bills, salaries, operational costs, etc., is known as operating income or operating profit.

**How to calculate operating income?**

To determine the operating income of a company, you can use the formula listed below:

Operating income = gross profit – operating expense

Where,

Gross profit = total income generated by selling goods – the total cost of goods.

### Example

For a more precise understanding, let us have an example below.

Suppose an ABC company has a 24% tax rate paid from the $700,000 operating income earned by the company. Now calculate the net operating profit after the tax company has made.

**Given data**

Tax rate = 24% = 0.24

Operating income = $700,000

**To Find**

NOPAT = ?

**Solution**

Using the formula of NOPAT will find out the net operating profit after the tax company has made.

NOPAT = operating income * (1 – tax rate)

Putting values in the formula:

NOPAT = $700,000 * (1 - 0.24) = $532,000

### How to use the NOPAT Calculator?

The steps to use the NOPAT calculator are as follows:

**Step 1: **Enter the value of operating profit in the first required input.

**Step 2: **Enter the value of the tax rate in the second required input.

**Step 3: **The calculator will automatically display an answer on the screen.

### Calculator use

To find out the net operating profit after the tax, you can use our NOPAT calculator. Just enter the required values, and it will display the answer on the screen.