How To Calculate NOPLAT

by Michael Keenan ; Updated July 27, 2017
NOPLAT gives investors an idea of a company’s profitability based on its operating income and expenses.

A company's net operating profit less adjusted taxes, or NOPLAT, shows the company's profits with adjustments made for taxes. It excludes non-operating income such as investments. The calculation is intended to show the income available to both debt and equity holders before payments are made.

NOPLAT Formula

To figure a company's NOPLAT, you start by calculating its operating profit, which equals the company's operating income minus operating expenses. This eliminates non-operating costs, such as interest on debt, from the formula. Next, multiply the result by the tax rate the company pays to figure out how much is left after taxes. For example, if a company has $500,000 in operating profit and pays a 20 percent tax rate, multiply $500,000 by 20 percent to get $400,000.

About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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