Scribd
Upload
50 views1 page

Understanding Operating Working Capital

Net operating working capital is current assets minus cash/marketables and current liabilities minus current debt. Net operating profit after tax (NOPAT) is a company's after-tax operating profit including what would accrue to shareholders if there was no debt. Net debt shows a company's overall debt situation by netting liabilities and debts with cash and liquid assets. Net non-current assets equals total non-current assets minus non-interest-bearing non-current liabilities. Net assets equals operating working capital plus net non-current assets.

Uploaded by

zigeunerunddiebe
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
50 views1 page

Understanding Operating Working Capital

Net operating working capital is current assets minus cash/marketables and current liabilities minus current debt. Net operating profit after tax (NOPAT) is a company's after-tax operating profit including what would accrue to shareholders if there was no debt. Net debt shows a company's overall debt situation by netting liabilities and debts with cash and liquid assets. Net non-current assets equals total non-current assets minus non-interest-bearing non-current liabilities. Net assets equals operating working capital plus net non-current assets.

Uploaded by

zigeunerunddiebe
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Operating working capital

Net operating working capital is defined as non-interest bearing current assets minus non-interest charging liabilities. Operating working capital = (Current assets Cash and marketable securities) (Current liabilities Current debt)

Net operating profit after tax (NOPAT)


In corporate finance, net operating profit after tax (NOPAT) is a company's after-tax operating profit for all investors, including shareholders and debt holders. It is equivalent to earnings before interest after taxes (EBIAT) and equal to NOPLAT (net operating profit less adjusted taxes) and is defined as follows: NOPAT = Operating profit x (1 - Tax Rate) An alternative formula is as follows NOPAT = Net profit after tax + after tax interest expense after tax interest income For companies with no debt and thus no interest expense, NOPAT is equal to net profit. In other words, NOPAT represents the company's operating profit that would accrue to shareholders (after taxes) if the company had no debt.

Net debt
A metric that shows a company's overall debt situation by netting the value of a company's liabilities and debts with its cash and other similar liquid assets. To put it simple, net debt refers to the total debt of a company minus cash on hand. Net debt is a measure of the ability of a company to repay its debts when due. Therefore, it is helpful to the analysts and investors in getting a better feel for whether a company is over- or under-leveraged, i.e. the capability of a company to afford its debts.

Net non-current assets


Net non-current assets = Total non-current assets Non-interest-bearing non-current liabilities

Net assets
Net assets = Operating working capital + Net non-current assets

You might also like