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.
