NOPAT from EBIT or from EBITA
McKinsey and Maubaussin say NOPAT is calc'ed from EBITA, but I remember from CFA or other websites it's from EBIT, which one is right?
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EBIT
You gotta account for amortization my G. EBIT
Depends on the nature of the amortization. If it’s a legitimate economic expense (i.e., something where there will be a need to replace the asset over time) then EBIT. However, you should back out something like intangible asset amortization that is just a purchase accounting convention associated with doing M&A.
yeah but...EBIT
But isn’t the PPA related amortization usually tax deductible? If so, then wouldn’t EBIT be used for NOPAT calc?
EBIT
1
This is referring to US GAAP primarily I suspect, under IFRS (so EMEA) you can capitalize some intangibles (i.e, development costs). So depends what accounting principles are used, essentially.
Nostrum ex suscipit facilis repellendus nisi et. Quae enim soluta sequi sit.
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