Net Income Versus Nofat

Running Head net Income/NOPAT

                      Lena Watts
              Net Income versus NOPAT
                            05/05/2011

Net Income versus NOPAT

      It is critical to explore the differences of net income and NOPAT as well as the benefits and negatives of this financial picture.   One gains insight into this finance picture about what speaks a clarified issue about the financial condition of the company.   There are different angles and this is when one looks at the defining moment and tolls to be utilized in this issue.

      Net income is a tool that defines the ‘bottom line” All businesses are interested in knowing this information as it is important in understanding performance of a company.   According to the web site of Investopedia,   .
      “A company's total earnings (or profit). Net income is calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes and other expenses. This number is found on a company's income statement and is an important measure of how profitable the company is over a period of time. The measure is also used to calculate earnings per share … An individual’s income after deductions, credits and taxes are factored into gross income. Deductions and credits are subtracted from gross income to arrive at taxable income, which is used to calculate income tax. Net income is income tax subtracted from taxable income.” (Investopedia)

      The positive aspect is this is a measuring tool to gage the financial performance of a company or corporation.   It is the usual one and it is gauged to the “bottom line”.” (Investropdia, http://www.investopedia.com/video/?utm_source=housead&utm_medium=halfsky&utm_content=160x240&utm_campaign=video)

      The negative aspect is that it can be manipulated to show a different aspect of a financial picture of a corporation’s performance.   One needs to peer into this issue and get a clear look at the idea of the real performance... [continues]

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