Net operating profit after tax and Real exchange rate: Difference between pages

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(NOPAT).  
The value of a currency in terms of real purchasing power.  


A measure of business profitability which is independent of the chosen capital structure, but which does take account of the taxation of the operating profits.


Often estimated as:
It is calculated by comparing the price of a hypothetical market basket of goods in two different countries, translated into the same currency at the prevailing exchange rate. 


NOPAT = PBIT x (1-T)
It is useful in measuring the price competitiveness of domestic goods in international markets.
 
 
where:
 
PBIT = profit before interest and tax; and
 
T = corporation tax rate.




== See also ==
== See also ==
* [[Profit before interest and tax]]
* [[Currency]]
* [[Exchange rate]]
* [[Real]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Manage_risks]]

Latest revision as of 23:46, 11 March 2023

The value of a currency in terms of real purchasing power.


It is calculated by comparing the price of a hypothetical market basket of goods in two different countries, translated into the same currency at the prevailing exchange rate.

It is useful in measuring the price competitiveness of domestic goods in international markets.


See also