Net Operating Profit Less Adjusted Taxes

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Net Operating Profit Less Adjusted Taxes

In accounting, a calculation of a business' operating income after all taxes are paid. The NOPLAT is not a recognized practice in the Generally Accepted Accounting Practices and so it is vital to note how each accountant and each firm arrive at the calculation. It is closely related to the after-tax operating income calculation, which is also unrecognized in GAAP.
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References in periodicals archive ?
If students can derive the same NOPLAT figure using both approaches, they will gain a fuller understanding of the reorganization of the income statement.
Free cash flow can be defined as NOPLAT plus depreciation and minus investment in invested capital.
1) NOPLAT (Net Operating Profits Less Adjusted Taxes)
Once we derive NOPLAT and invested capital, return on invested capital can be defined below:
In the illustrated Excel spreadsheet, there are four worksheets referred as "Financial Statements", "NOPLAT, IC & FCF", "Beta Estimation", and "Enterprise DCF Model" as shown below:
[g.sub.NOPLAT] = rate at which the company's NOPLAT without the effect of tax planning grows every year.
The limited term in which tax savings can be achieved requires that the tax benefit from planning be valued separately from the value of the NOPLAT without tax planning.
(5.) The effect of Type 2 planning on growth of a company's NOPLAT before tax planning should be correlated with the company's phase in the business life cycle.