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发表于 2013-4-12 23:18
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I did this reading day before yesterday, but did not think thru this and took the material for its face value. Good you pointed it out.
Now, thinking on it, this is how I have explained it to myself for now:
1. Operating Profits only include profits generated by Operating Assets (that is Working Capital and PP&E) and DOES NOT include any profits from use of any Intabgible Assets (e.g. Goodwill). This is the reason why any Amortizations as expenses are ignored in Operating Profits calculation.
2. Operating Profits are also independent of a firm’s Capital Structure. That is, it does not care how you have financed your Operating Assets. So, any Interest Expenses on any Debt financing are kept out of Operating Profits.
3. Because, expenses on Interest and Amortizations are ignored completely, the base for taxes FOR CALCULATION OF OPERATING PROFITS is EBITA and not EBT. Meaning, tax estimation is higher for NOPLAT calculation, as it assumes that Company is having no Interest Bearing Debt and no Non-Operating Assets (like goodwill).
Hope this gives you something to think further. Maybe someone can help explain it better. |
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