Corporate 2 - Appunti 2 PDF

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Summary

formula of second lesson
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Description

Reorganizing financial statement

• ROIC ROIC stands for Return on Invested Capital, and is a profitability or performance ratio that aims to measure the percentage return that investors in a company are earning from their invested!capital. The ratio shows how efficiently a company is using the investors’ funds to generate income. Benchmarking companies use ROIC ratio to compute the value of other companies.#

• NOPLAT"

NOPAT stands for!Net!Operating!Profit!After!Tax and represents a company’s theoretical income from operations if it had no debt (no interest expense). NOPAT is used to make companies more!comparable!by removing the impact of their capital structure.! In this way, it’s easier to compare two companies in the same industry (i.e. one with no leverage and the other with significant leverage).$ $

Simple form:# Income from Operations x (1 – tax rate)# Long form: [Net Income + Tax + Interest Expense + any Non-Operating Gains/Losses] x (1 – tax rate)# NOPLAT equals revenues minus operating costs, less any tase that would have been paid if the firm held only core assets and was financed only with equity.# • EBITA EBITA, which stands for!earnings!before!interest,!taxes, and!amortization is a method of determining profitability. EBITA is a variation of the more commonly used EBITDA, which adds!depreciation!into the calculation.!# = [ revenues - operating costs - depreciation + amortizations ]# • Invested capital" INVESTED CAPITAL = operating assets - operating liabilities Op assets = [ pep, account receivable, immaterial assets, inventory, cash ] Op liabilities = [ account payable]# TOTAL FUNDS INVESTED = INVESTED CAPITAL - NON OPERATING ASSETS" OR$ % % % % DEBT + EQUITY...