The Formula
(Expressed as a %)
It is similar to Return on Assets (ROA), but takes into account sources of financing. Net Operating Profit After Tax (NOPAT) is equal to EBIT * (1 - tax) -- the return on the capital employed should be measured in after tax terms.
Read more about this topic: Return On Capital Employed
Famous quotes containing the word formula:
“Ideals possess the strange quality that if they were completely realized they would turn into nonsense. One could easily follow a commandment such as “Thou shalt not kill” to the point of dying of starvation; and I might establish the formula that for the proper functioning of the mesh of our ideals, as in the case of a strainer, the holes are just as important as the mesh.”
—Robert Musil (1880–1942)
“Every formula which expresses a law of nature is a hymn of praise to God.”
—Maria Mitchell (1818–1889)