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$75k

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6.06

vs previous period

Net Operating Profit After Tax (NOPAT)

Date created: Jul 12, 2021  •   Last updated: Feb 2, 2022

What is Net Operating Profit After Tax?

Net Operating Profit After Tax (NOPAT) is a financial performance metric that calculates profit gained through core operations after taxes. This metric is used to measure operating efficiency without the impact of debt, because the calculation does not take tax benefits from debt into consideration. In other words, if a company has no debt, their NOPAT and net income after tax would be identical.

Net Operating Profit After Tax Formula

ƒ Sum(Operating Income) * (1 - Sum(Tax Rate))

How to calculate Net Operating Profit After Tax

If operating income is $100,000 and the tax rate is 30%, then NOPAT is $100,000 * (1 - 30%) or $100,000 * .7, which is $70,000.

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How to visualize Net Operating Profit After Tax?

Typically, you would view your NOPAT on the balance sheet. If you decide to track this number on a dashboard, you should take a similar approach and display your NOPAT as a dollar amount in either a table or a summary chart. Take a look at the example:

Net Operating Profit After Tax visualization example

klipfolio image

Net Operating Profit After Tax

$75k

arrow-right icon

6.06

vs previous period

Summary Chart

Here's an example of how to visualize your current Net Operating Profit After Tax data in comparison to a previous time period or date range.
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Net Operating Profit After Tax

$75.35k

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6.09

vs previous period

Summary Chart

Here's an example of how to visualize your current Net Operating Profit After Tax data in comparison to a previous time period or date range.

More about Net Operating Profit After Tax

NOPAT is a useful metric to determine operating efficiency of core business operations without the impact of debt. This is useful when trying to calculate free cash flow to the firm, mainly used to consider mergers or acquisitions. By looking at earnings as though capital is unleveraged, you obtain a pure measure of operating efficiency.