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EBIT (1 - Tax Rate)

Working Capital (WC)

Current Assets
Net Working Capital (NWC)
Current Assets - Current Liabilities
Net Operating Working Capital (NOWC)Current Assets - Non-interest Bearing Current Liabilities
Operating Capital (OC)
NOWC + Net Fixed Assets
Net Fixed Assets (NFA)
Gross PPE - Acc. Dep.
Net Cash Flow (NCF)

Net Income + Dep. & Amort. (Net Income + Non cash

charges - Non Cash Revenues)

NOPAT + Depreciation and Amortization (Non Cash

Net Investment in Operating Capital Operating Capital CY - Operating Capital PY
Gross Investment in Operating Capital Net Investment + Depreciation and Amortization
OCF - Gross Investment in Operating Capital
OCF - (Capital Expenditure* + NOWC)
Free Cash Flow (FCF)
NOPAT - Net Investment in Operating Capital

Measure the performance of a company's
operations or the effectiveness of its
operating managers and employees.

vs. accounting profit; valuable to investors

coz cash not paper profit is paid out as
dividends and plowed back in the business.

Operating Cash Flow (OCF)

Economic Value Added (EVA)

Market Value Added (MVA)

Cash available for distribution to all


NOPAT - (After tax Cost of Capital) (Operating Capital)

Measures managerial effectiveness in a

given year.

(Share Price * No. of Shares) - Book Value of Co.

in consonance of shareholder wealth

maximization; measures the effects of
managerial actions at the very inception of
the company

* Capital Expenditure is in Gross Fixed Assets