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Anonymous A

on Mar 08, 2018

Global

How to calculate "Net operating profit"?

Hi,

I was just wondering how to calculate the net operating profit of a firm. During university I only learned how to calculate the operating cash flow and do not know if there is a difference between these two?

I calculate operating cash flows like this:

Revenue

- Costs

- Depreciation

= EBIT

- TAX

= EBIAT

+ Depreciation

= Operating cash flows

Is this correct so far? I read that net operating profit is like EBIAT because in a calculation I read online they did not add depreciation again.

Thanks for helping me to understand this

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