Could someone please clarify some of the different earnings definitions? Operating Income = Sales - COGS - SG&A - DA EBIT = Operating Income NOI = Net Operating Income = Operating Income + DA NOPAT = Net Operating Profit After Tax = EBIT(1-tax) CFAT = NOI - Int. Payment - (NOI - DA - Int. Expense) * (tax) Do these seem right to you? I guess it always confuses me that interest payments are treated as an operating cash outflow (necessarily under GAAP, or possibly as financing under IFRS) but not as an operating expense. Thanks!
All correct… Operating Income = EBIT NOPAT = EBIT (1-T) in the HIGHLY unlikely scenario you are asked about NOPLAT, it is the same as NOPAT but adjusted for Deferred Taxes (these are taxes not yet paid, thus you would ADD these back since it was NOT a cash outflow. I’m not sure about NOI but I associate NOI as EBITDA, which in that case NOI = Gross Income - Fixed Expenses - Variable Expenses, and of course since I view it as EBITDA, depreciation should not be included in any expenses.