Which of the following items should not be included in net operating profit after tax (NOPAT)?
A) Revenue
B) Cost of Goods Sold
C) Selling, General & Administrative Expenses
D) Decrease in Accounts Receivable
E) None of the above

Question

Quizplus · Accepted Answer

NOPAT is calculated using operating income, which includes revenues and expenses related to the core business operations. A decrease in accounts receivable is a balance sheet item reflecting cash flow changes rather than an income statement expense or revenue, and thus, it should not be included in NOPAT calculation.

Which of the Following Items Should Not Be Included in Net