Seeking Alpha

David Trainer's  Instablog

David Trainer
Send Message
Follow me on Twitter: @NewConstructs David is CEO of New Constructs (, an independent research firm that leverages proprietary technology to find key insights from the Financial Footnotes of 10Ks and 10Qs. Having analyzed over 70,000 annual reports and their Financial... More
My company:
New Constructs
My blog:
The Diligence Institute
My book:
The Valuation Handbook
  • NOPAT: Definition And Formulae For Net Operating Profit After-Tax And NOPAT Margin 0 comments
    Oct 2, 2012 12:40 PM

    NOPAT is the after-tax operating cash generated by the business, excluding unusual losses and gains, financing costs, goodwill and other non-cash items. It can be calculated two mathematically equivalent ways:

    Figure 2: Formulae for NOPAT


    Source: New Constructs, LLC

    Below are the primary accounting distortions in reported financial statements that require economic translation and adjustment for the NOPAT calculation.

    1. Hidden unusual items from the MD&A and footnotes
    2. Unusual items found on the income statement and statement of cash flows
    3. Non-operating and unusual taxes
    4. Off-balance sheet debt
    5. Income from Unconsolidated Subsidiaries
    6. Minority Interests
    7. Restructuring/non-recurring charges
    8. All Non-operating Items below EBIT
    9. All After-tax Items
    10. Unusual items hidden in pension expenses
    11. Abnormal assumptions that affect stock option and pension expenses
    12. Contact us to learn more.

    NOPAT Margin is equal to NOPAT/Total Operating Revenues.

Back To David Trainer's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


More »

Latest Comments

Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.