- This topic has 3 replies, 2 voices, and was last updated 9 years ago by
.
- Posts
Hi
I wanted to ask about how NOPAT is calculated in the answer to Jun’14 Q1 and Dec’12 Q3A
I am having trouble with Tax adjustment in particularI was thinking that when I start from Operating profit, as they did in the answer, I then need to deduct the whole amount for Tax as per figure in P&L but adjusted by Tax cash paid and Tax benefit of interest, but I am getting different answer then
It seems that in the answer deduction was Tax paid in cash and Tax relief on interest – Tax figure from P&L is not considered at all?
Would you know why that is the case?
Thank you
EVA is quite interested in cash flows (hence adding back non-cash expenses). If there is a difference between tax in the P&L and tax paid, choose tax paid.
That makes sense, I was thinking I have to somehow combine both figures
But if I wanted to start with Profit after Tax figure, I know I need to add back Net cost of Interest but what about cash paid tax amount in such case?
just in case question mentions PAT figure only and then also gives figure for payment of tax done during the year? If that could happen
Would I need to make any tax related adjustments then?
Thank you
- The topic ‘question about EVA – Tax deduction’ is closed to new replies.