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For companies with no debt and thus no interest expense, NOPAT is equal to net-profit-1. In other words, NOPAT represents the company's operating profit that would accrue to shareholders (after taxes) if the company had no debt.

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Q: Difference between NOPAT and net income?
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Difference between gross income and net income?

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What is the return on total assets ratio?

Answer:Return on total assets (ROA) equals net income divided by total assets. It is a measure of performance, because the amount that is earned with the assets is divided by the value of the assets (investments). AlternativeInstead of dividing net income by assets, often the interest expense is added back to net income. An alternative measure is thefore:ROA = NOPAT / total assetswhere NOPAT is net operating profit after tax, which is computed as net income plus the interest expense x ( 1 - tax rate).NOPAT shows the profitability of all assets (excluding the cost of financing), but including the 'tax shield' on the interest expense (because interest expense is tax deductable).This is considered to be more precise than dividing net income by assets.Return on equityReturn on equity is a similar ratio, where net income is divided by shareholders' equity. It shows the percentage return that the company has made on its equity.


What is the net cash flow?

Net cash flow is the difference between income and expenditure.


What is the journal entry for net income?

No journal entry for net income it is the difference between total expenses and total revenue and it is the balancing figure


What is the difference between gross income net income and taxable income?

Gross income is the raw income earned while net income is after deductions of interest taxes while taxable income is that income on which tax is calculated.

Related questions

Difference between gross income and net income?

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Are revenues the same as net income?

Revenues are earnings from sales of products and net income is the difference between revenues and expenses.


Difference between net income and gross income?

Gross income is the difference between revenue and direct expenses while net income is the income from all activities of business whether oprating activities or other activities.


What is net flow?

Net cash flow is the difference between income and expenditure.


What is the net flow?

Net cash flow is the difference between income and expenditure.


What is the return on total assets ratio?

Answer:Return on total assets (ROA) equals net income divided by total assets. It is a measure of performance, because the amount that is earned with the assets is divided by the value of the assets (investments). AlternativeInstead of dividing net income by assets, often the interest expense is added back to net income. An alternative measure is thefore:ROA = NOPAT / total assetswhere NOPAT is net operating profit after tax, which is computed as net income plus the interest expense x ( 1 - tax rate).NOPAT shows the profitability of all assets (excluding the cost of financing), but including the 'tax shield' on the interest expense (because interest expense is tax deductable).This is considered to be more precise than dividing net income by assets.Return on equityReturn on equity is a similar ratio, where net income is divided by shareholders' equity. It shows the percentage return that the company has made on its equity.


What is the net cash flow?

Net cash flow is the difference between income and expenditure.


What is the difference between revenue and expense called?

Net Income


What is the difference between net and gross margin?

Gross margin is Gross income as a percentage of revenue. Net Margin is net income as a percentage of revenue.


Difference between net income and revenue?

Revenue is all the money a business brings in. Net income is revenue minus all the expenses of the business. Net income is profit.


What is the difference between net and gross on a paycheck?

Your gross income is your income before anything is taken out. Your net income is your remaining income after deducting taxes and expenses--so on your paycheck, your net is your "take home pay".


What is the journal entry for net income?

No journal entry for net income it is the difference between total expenses and total revenue and it is the balancing figure