Question: Why do financial analysts prefer NOPAT as a measure of profit, vs. more accounting based measures such as EBIT or net income?

Why do financial analysts prefer NOPAT as a measure of profit, vs. more accounting based measures such as EBIT or net income?

Step by Step Solution

★★★★★

3.44 Rating (170 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

NOPAT is calculated as aftertax EBIT It measures the ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

502-B-A-E (1773).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Q:

A 90% interest in Saxton Corporation was purchased by Palm Incorporated on January 2, 2024. The capital stock balance of Saxton Corporation was $3,000,000 on this date, and the balance in retained...

Q:

As a measure of productivity, Verizon Wireless records the number of customers each of its retail employees activates weekly. An activation is defined as either a new customer signing a cell phone...

Q:

As a measure of productivity, Verizon Wireless records the number of customers each of its retail employees activates weekly. An activation is defined as either a new customer signing a cell phone...

Q:

As a measure of productivity, Verizon Wireless records the number of customers each of its retail employees activates weekly. An activation is defined as either a new customer signing a cell phone...

Q:

Please show your work. A B C D E F G H J K L M N o F 1 Q1: 2 An important task in performing business valuations is normalizing the historical financial statements. (a). Using the information...

Q:

I need problem E14-11 solved on page 714 of the document attached. JWCL165_c14_674-725.qxd 8/16/09 7:46 AM Page 674 14 Financial Statement Analysis Chapter STUDY OBJECTIVES After studying this...

Q:

Hello, I need help with exercise E14-3 in the attached file. (a) Prepare a horizontal analysis of the balance sheet data for Conard Corporation using 2011 as a base. (b) Prepare a vertical analysis...

Q:

first photo is info that needs to be used the other photos are a example of the problem and how it should be done and format the numbers are diffrent 3 of 3 HW Score: 0%, 0 of 100 pts Score of 40 pts...

Q:

Hello Ruchi, I hope you have been doing good! I have attached the instructions word document and the excel workbook for part 5. This is the continuation from part 4. Please let me know if you have...

Q:

You are starting a business that manages camping sites, and you have $2,000 of equity. Create a simple balance sheet and income statement for the first 2 years of business. The images are just for...

Q:

find the questions below for details Question 1 For this year, JJ company has 20,000 net earnings on income statement and 7,000 net cash inflow from operating activities, 15,000 net cash outflow from...

Q:

a. What is a sample space? Give an example of a sample space for a scenario involving (i) a designed experiment and (ii) an observational study. b. What are disjoint events? Give an example of two...

Q:

find the correct value of a and b y = 13.055 $21.8 440 y 11 200 440 +13 incorrect incorrect At least one of the answers above is NOT correct. correct Monetary values must have exactly two decimal...

Q:

Question 2 1 pts A is an instruction to trade at a maximum price available, but only if the available price is less than the price specified. market sell order mintrerreder makel buy order limit vel...

Q:

Determine whether the following sampling is dependent or independent. Indicate whether the response variable is qualitative or quantitative. A researcher wishes to compare academic aptitudes of...

Q:

Aber Company manufactures one product. On December 31, 2016, Aber adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO inventory method was $900,000....

Q:

Fergie has the choice between investing in a State of New York bond at 4 percent and a Surething Inc. bond at 6.6 percent. Assuming that both bonds have the same nontax characteristics and that...

Q:

How we achieve our personal vision without developing self-motivation skills? Write a short, to-the-point answer. Word Limit: 50 words.

Q:

Individual Income Taxatio Due December 05, 2019 Alice J. and Bruce M. Jones are married taxpayers who file a joint return. Alice’s birthday is September 21, 1961, and Bruce’s is June 27,...

Q:

Complete a SWOT in your game: a) Go to the SWOT page in the Marketing Plan. b) Choose a key segment for your company. This should be one that is key to your future success. It could be one that you...

Q:

Assume Lenny Company manufactures specialized computer peripheral parts like speakers and modems. It is a new company that has been in operation for just two years. During those two years, Lennys...

Q:

Should partners of a business be held personally liable for the debts of the business, or should their business activities and debts be kept separate from their personal activities? John and Jeff...

Q:

Should companies be required to pay cash dividends on their stock to shareholders, or should it be left up to the companies discretion whether they pay dividends or reinvest those funds back in the...

Q:

Vandelay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $3,066,000 and will last for six years. Variable costs are 40 percent of sales, and fixed...

Q:

5-A company just paid its annual dividends of $1.30 per year. The company has developed a new technique to manufacture its product that is anticipated to provide abnormal dividend growth of 12% per...

Q:

This subarea of finance involves methods and techniques to mske appropriate decisiens sbout what kinds of socuenies to own, which firtis' socurfies to buy, and how to be paid back in the form that...