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EVA Calculation_Dec 10 LOL Question

This topic has 1 reply, 2 voices, and was last updated 7 years ago by Ken Garrett.

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April 11, 2018 at 7:54 pm #446220
sss111
Member
- Topics: 37
- Replies: 5
When calculating the Adjusted net operating profit aftet tax NOPAT, can i also calculate as such:
PBIT 43.5
Deduct interest (7.8)
Deduct tax 25%×7.8 (1.95)
Resulting in a NOPAT of $33.7m different from NOPAT $32.7m starting with PAT in calculation..
Thank you in advance Sir !
April 12, 2018 at 6:46 pm #446431
Ken Garrett
Keymaster
- Topics: 10
- Replies: 10606
I don’t understand your first calculation. To get NOPAT, you do not want to deduct interest.
NOPAT = 43.5 x 75% = 32.6.
Or, PAT = 26.8 and add back interest net of tax ie 7.8 x 0.75 = 32.65, or 32.7.
The 0.1 difference is rounding.
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