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
Hi, I think interest income can be generalized to "non-operating profits", while it can be before-tax or after-tax. If after-tax, I normally do a theoretical tax on the operating income only
Angelo, that's why I am subtracting it in line with taxes. Btw, you will never have interest income in consulting cases