Net Operating Profit After Tax Research Articles

Financial Performance Analysis With Economic Value Added On Telecommunication Companies Listed In BEI

This research describes the financial performance based on the Economic Value Added (EVA) method, which aims to know the condition of Net Operating Profit After Tax (NOPAT), Cost of Capital (COC) condition, and financial performance condition based on Economic Value Added (EVA) in telecommunications company which is listed on BEI. The sample using PT. Telekomunikasi Indonesia, PT. XL Axiata and PT. Indosat. on 2012-2016. This research uses a descriptive with quantitative approach. The result of the analysis shows that the condition of NOPAT PT. Telekomunikasi Indonesia and PT. XL Axiata is good and positive, while NOPAT PT. Indosat in 2013 is negative. The condition of COC for all companies is positive and fluctuating. EVA Condition for PT. Telekomunikasi Indonesia on 2012-2016 positive, which means EVA> 0. It shows that the company can add value for the company. EVA condition for PT. XL Axiata in 2012 and 2013 was positive or EVA> 0, on 2014 and 2015 EVA was negative or EVA < 0 and in 2016 EVA had a positive result. PT. Indosat is only able to make value for the company just on 2012 and 2016 with EVA positive or EVA> 0, then on 2013 to 2015 the result of EVA is negative or EVA < 0 which means the company cannot make a value-added for the company.

Faktor-Faktor Yang Mempengaruhi EVA

Capital structure, return on invested capital (ROIC), fixed assets, and net operating profit after tax (NOPAT) are the factors that affect economic value added (EVA). Understanding the potential effects of the independent factors on the dependent variable, which is economic value added (EVA), is the goal. Descriptive statistics, the traditional hypothesis tests (normality, multicollinearity, heteroscedasticity, and autocorrelation), the t-test and F-test, and coefficient of determination were all used in this work. According to descriptive statistics, the data is normal and passes the traditional assumption test. Capital structure largely has no effect on EVA. Significant effects of ROIC, Fixed Assets, and NOPAT on EVA. EVA is impacted simultaneously by the capital structure, ROIC, fixed assets, and NOPAT. The capital structure, ROIC, fixed assets, and NOPAT are independent variables that have an impact on 35.2% of the dependent variables, while other variables have an impact on 64.8%.

ANALISIS KINERJA KEUANGAN PERUSAHAAN PT.INDUSTRI JAMU DAN FARMASI SIDO MUNCUL TBK

Abstract
 It is important to assess the company's financial performance to assist management and investors in making decisions. One method to analyze the company's financial performance assessment is using the Economic Value Added (EVA) analysis method. EVA is an analytical method to determine the company's added value by subtracting economic profit from the cost of capital issued. EVA method analysis begins by calculating Net Operating Profit After Tax (NOPAT), Invest Capital (IC), Weighted Average Cost of Capital (WACC), Capital Charge (CC) and Economic Value Added (EVA). This study aims to assess the financial performance of PT. Sido Muncul's Herbal and Pharmaceutical Industry, 2017-2019 using the Economic Value Added (EVA) analysis method. This research is descriptive and uses a quantitative approach. The data in this study are financial statements, namely balance sheets and income statements. From the results of the study, the EVA value during the research year increased and was positive (EVA > 0). This shows that PT. The Herbal and Pharmaceutical Industry of Sido Muncul Tbk is able to create added economic value for management and investors (shareholders). After being compared with similar companies, the EVA value which occupies the highest position is PT. Kalbe Farma Tbk, then the next sequence is PT. Herbal and Pharmaceutical Industry Sido Muncul Tbk and the last one is PT Darya-Varia Laboratoria Tbk.
 
 Keywords: Financial statement analysis, NOPAT, IC, WACC, CC and EVA

Economic Value-Added Creation by Optimizing Capital Structure in Project Finance

Infrastructure Projects are large investment by the public and/or private sector that required enormous financial resource commitment to build physical asset and facilities needed for economic development so that the company need project financing to support with. Project finance is based on debt repayment from project companies’ revenue and not on the sponsors or the developer’s balance sheet, so the project companies should assure the cash flow is sufficient for debt repayment and dividend payment. Beside that investors still have to analyze the value created in that project with highest positive Economic Value Added. Net Operating Profit After Tax (NOPAT) need to cover cost of invested capital to create value so that the ratio of NOPAT to total Project Cost (Return on Invested Capital) is should be more than the weighted average cost of capital (WACC). The capital structure doesn’t have an optimum weight and cost as long as the Return on Invested Capital (ROIC) higher than WACC.

Financial Behaviour in a Mandatory Conversion Process: Empirical Evidence from Colombia

Convertible bonds are attractive because they offer alternatives for both issuers and investors. Therefore, several companies have used this financial mechanism to raise capital. Although several studies have been published on this topic, mandatory convertible bonds (MCBs), which are subsets of convertible bonds, and their effect on economic value added (EVA) have not been explored deeply. This study analyses what happens to the EVA before, during and after the issuance when investors are involved as shareholders of a company issuing MCBs. A Colombian company is used as a case study. The results reveal that one of the main reasons behind the change in the EVA is not only the weighted average cost of capital or the invested capital but also the operating profit. The net operating profit after tax (NOPAT) depends on operating profit. Therefore, to generate a positive EVA, the NOPAT margin needs to be higher than the margin of financing costs.

Analisis Kinerja Keuangan dengan Metode Economic Value-Added pada Studi Kasus Perusahaan Subsektor Pertambangan Minyak dan Gas Bumi yang Terdaftar di Indeks Saham Syariah Indonesia (ISSI)

<em>Oil and gas are non-renewable natural resources, whick means they can be exhausted within a certain periode of time, if no new reserves of oil and natural gas resources are found. Energy, especially oil and gas, is very limited amount, but the world’s needs for oil and gas are currently increasing, so making investments in the oil and gas mining subsector will be an attractive choice for investors. World demand of oil and gas increases, while the limited its availability in each country has caused fluctuations in its exports and imports. They face a difficult assessment of the company performance in this subsector. Therefore, we need an analysis of the financial performance in oil and gas mining subsector companies as a tool to assess how the performance of the in this area. Economic value-added (EVA) method is one of the right measurement tools to assess the performance of companies in the mining sector. The aim of this study is to determine the financial performance of companies by using the EVA (economic value-added) method in the oil and gas subsector companies listed on the ISSI (Indonesian Sharia Stock Index) in period 2013-2017. The calculation of EVA value of a company is preceded by determining the value of Net Operating Profit After Tax (NOPAT), Weighted Average Cost of Capital (WACC), capital charges (CC), and invested capital (IC) from data that has been collected in the secondary sources. Four companies in oil and gas mining subsector listed on the Indonesia Sharia Stock Index (ISSI) were analyzed in this research. The results showed that two companies have positive EVA, while rest of two companies have positive and negatif EVA in certain years. A positive EVA means that there is an economic added-value to the company.</em>

Is Apollo Tyres Creating or Destroying Shareholders’ Wealth?

There has been a growing concern about the performance measures based on traditional accounting information such as return on equity (ROE), return on capital employed (ROCE), return on net worth (RONW), earning per shares (EPS), net operating profit after taxes (NOPAT) and return on investment (ROI). These measures although widely used fail to capture the shareholders’ value creation/destruction as a result of management actions. The concept of economic value added (EVA) and market value added (MVA) have gained popularity all over the world particularly in the USA, the UK and European countries. EVA and MVA are finding acceptance as internal and external performance measures because these two measures are consistent with the organizational objective of shareholders’ value creation. Due to its popularity, a lot of research work has been conducted in the late 1990s covering diverse issues on EVA and MVA. In the light of the above, the present study made an attempt to calculate EVA as well as MVA and to analyze whether Apollo Tyres is creating or destroying shareholders’ wealth during the study period.

KINERJA KEUANGAN DENGAN METODE EVA (ECONOMIC VALUE ADDED) PADA BPR TANJUNGPINANG

EVA is a method of financial management to measure the economic profit in a company that states that prosperity can only be created when the company is able to meet all operating costs and capital costs. With EVA method can be known whether PT BPR Central Sejahtera Tanjungpinang happened addition to its economic value. The research method used is qualitative descriptive method. The EVA classification can be calculated from the NOPAT (Net Operating Profit After Tax) component, WACC (Weighted Average Cost of Capital) and IC (Invested Capital) contained in the financial statements of PT BPR Central Sejahtera Tanjungpinang with data from 2012 until 2017. This research reveals a positive EVA result in 2012 with an EVA of 63,515,000, in 2013 with EVA of 2,138,086,000, in 2014 with EVA of 73,105,000, in 2013 with EVA of 797,470,000 and in 2014 with an EVA value of 714.750.000. In addition to these positive results, the study also revealed negative EVA results in 2015 with an EVA value of minus 65.06 million. From the analysis results obtained conclusion that the financial performance of PT BPR Central Sejahtera Tanjungpinang quite good. PT BPR Central Sejahtera Tanjungpinang can add value to the company in 2012,2013,2014,2016 and 2017, except in 2015, PT BPR Central Sejahtera Tanjungpinang is considered failed to increase its economic value

PENILAIAN KINERJA KEUANGAN PT. BANK MUAMALAT INDONESIA, TBK DENGAN METODE ECONOMIC VALUE ADDED

The purpose of this study to determine the financial performance with the use of the EVA method to the assessment of the performance of PT Bank Mualamat Indonesia Tbk in the period 2010 - 2014. The research method used is quantitative descriptive method using Economic Value Added (EVA), which is an analytical method for evaluating the performance a company to take measurements of the profits (value) economically produced by the company during the period (period of time) specific. The results show the value of Bank Muamalat EVA is negative, meaning that Bank Muamalat in the year 20102014 can not create value-added enterprise or net operating profit after taxes (NOPAT) produced by the company is not able to finance or cover all capital costs or expenses incurred. In 2014 the value of EVA Bank Muamalat increasing, although still negative.

PENILAIAN KINERJA KEUANGAN PT. BANK MUAMALAT INDONESIA, TBK DENGAN METODE ECONOMIC VALUE ADDED

The purpose of this study to determine the financial performance with the use of the EVA method to the assessment of the performance of PT Bank Mualamat Indonesia Tbk in the period 2010 - 2014. The research method used is quantitative descriptive method using Economic Value Added (EVA), which is an analytical method for evaluating the performance a company to take measurements of the profits (value) economically produced by the company during the period (period of time) specific. The results show the value of Bank Muamalat EVA is negative, meaning that Bank Muamalat in the year 20102014 can not create value-added enterprise or net operating profit after taxes (NOPAT) produced by the company is not able to finance or cover all capital costs or expenses incurred. In 2014 the value of EVA Bank Muamalat increasing, although still negative.

Analyzing Islamic Micro Finance Performance with Economic Value Added (EVA): Learning from Baitul Wat Tamwil (BMT) Usaha Gabungan Terpadu Sidogiri Indonesia

Analyzing Islamic Micro Finance Performance with Economic Value Added (EVA). EVA analysis is used for deciding the regulations of investment of BMT. Monetary report is analyzed with EVA, Net Operating Profit After Tax (NOPAT), Weighted Average Cost of Capital (WACC), and Invested Capital. The result of performance using EVA shows that BMT can create value. NOPAT underwent a significant increase compare with the capital fund. The profit that is created is higher than accounting profit which shows that BMT has a very good performance. The capital which is consists of debt and equity has been used efficiently and effectively so that it can increase the profit. The BMT officer should pay attention to the financial performance in order to decide the regulation and investment that will be done. Investment and activity which is done by BMT should be resulted more value so that it can give the real profit for the development of BMT.

TADCO Vision Enhancement Using EVA to Gauge Creation of Shareholders Value (SHV)

The study is done as an attempt to rectify the drawback of the digital vision used by Tabuk Agricultural Development Company (TADCO) that striving to attain certain level of revenue irrespective of its remunerative capacity to shareholders. Economic Value Added (Economic Profit) concept is used to show at what level of Net Operating Profit After Tax (NOPAT) shareholders will be fairly compensated for taking the risk to invest in the company stocks.

Is EVA a Superior Measure of Shareholder Value? Evidence from CNX Nifty Constituent Firms

Business organisations are under pressure to device measures to increase shareholder value, improve financial performance and incentivize compensation plans that motivates and encourages managers to increase shareholders wealth and contribute towards business growth. A recent innovative trade-marked version of residual income measure known as economic value-added (EVA) is being experimented and implemented in many organisations. This paper attempts to empirically test if any residual income components such as Net Operating Profit after Tax (NOPAT), Return on Net Assets (RONA) and cash flow measure i.e., Free Cash Flow(FCF), the predictor variables, together variable wise and year wise from 2009 to 2012 has any influence on Economic Value Added (EVA), the criterion variable in the study. To examine the influence of the said variables data of 16 sample companies from CNX IT index has been taken and required financial information was sourced from CMIE’s Capitaline database. The descriptive statistics, correlation and multiple regression analysis has been performed using SPSS 20.0 version through ENTER method and STEPWISE method for every year across the sample companies. Statistical results prove that NOPAT has highest influence on EVA throughout the study period compared to other variables. Also compounded annual growth rate (CAGR) of EVA and year on year growth rate (YoYGR) of all variables has been computed.

Identify the Superior Measure Among the Traditional and Modern Measures by Establishing Relationship with Stock Market Returns – A Studyon Select Cement Companies in India

There has been a growing concern about the performance measures based on traditional accounting information such as Return on Equity (ROE), Return on Capital Employed (ROCE), Return on Net Worth (RONW), Earning Per Shares (EPS), Net Operating Profit After Taxes (NOPAT) and Return on Investment (ROI) etc. These measures although widely used fails to capture the shareholders’ value creation/destruction as a result of management actions. The concept of EVA (Economic Value Added) and MVA (Market Value Added) has gained popularity all over the world particularly in USA, UK and European countries as companies are using modern measures (EVA and MVA) as an internal as well as external performance measure because EVA and MVA are consistent with the organizational objective of shareholder’s value creation. In the present study an analysis is made to establish relationship between Stock Market Returns (StMR) and ROA, ROCE, RONW, EPS, EVA, and MVA.

Further evidence on relative and incremental information content of EVA and traditional performance measures from select Indian companies

PurposeThe main objective of this study is to examine the claim of economic value added (EVA) proponents about its superiority as a financial performance measure compared to five traditional performance measures, i.e. net operating profit after tax (NOPAT), cash flow from operations (OCF), earnings per share (EPS), return on capital employed (ROCE) and return on equity (ROE) in Indian manufacturing sector, and simultaneously provide its empirical evidences. To achieve this, relative and incremental information content of various performance measures and their relationship with market value added (MVA) is tested and examined.Design/methodology/approachPrincipal component analysis (PCA) is one of the important multivariate methods utilized in business research for data reduction, latent variable modeling, multicollinearity resolution, etc. The present sample consists of 608 firm‐year observations from the Indian manufacturing sector for the period 2000‐2007. Firstly, principal component analysis (PCA) is employed to determine the important variables that explain market value. Secondly, alongside PCA, multiple regression models (OLS) are used to examine the relative and incremental information content of EVA and traditional performance measures.FindingsThese results about PCA reveal that variables like NOPAT, OCF, ROE, ROCE and EVA have maximum influence on the market value (MVA) of the sample companies, whereas EPS has a negative loading, so, EPS is discarded for further analysis. Further, the PCA loading matrix reveals that NOPAT, OCF, ROE and ROCE outscore EVA. The regression results regarding the relative information content test reveal that NOAPT and OCF outperform EVA in explaining the market value of Indian companies. The incremental information content test shows that EVA makes a marginal contribution to information content beyond NOPAT, OCF, ROCE and ROE. Overall, these empirical results about Indian companies do not support the Stern Stewart hypothesis that EVA is superior to traditional accounting‐based measures in association with market value of the firm.Originality/valueThe study concludes that along with financial variables, other non‐financial variables such as employees, product quality, etc., should be considered in order to capture the unexplained variation in the market value of Indian companies.

Linkage between Market Value Added (MVA) and other Financial Variables: An Analysis in Indian Automobile Industry

The present article makes an attempt to find the relevance of Stern and Stewart's claim that MVA of the firm is largely positive associated with or driven by its EVA generating capacity in the Indian context. The study also portrays the temperament of association between MVA and other selected traditional financial variables like Earnings Per Share (EPS), Return on Capital Employed (ROCE), Net Operating Profit After Tax (NOPAT) and Return on Net Worth (RONW). The regression analysis has been carried out, and the succeeding outcomes that have been arrived revealed that NOPAT and RONW are the most significant variable with MVA followed by EVA, ROCE and EPS. In almost all cases, the positive relationship through correlation model has been established between the variables under reference. Thus, revealing the influence of this tool for rummaging the financial potency of Indian corporate comprising an industry and Indian industries comprising the particular sector may be measured as the need of the hour for all such companies that have not starting reporting their financial position in terms of EVA and MVA.

Models for measuring and predicting shareholder value: A study of third party software service providers

In this study, we use the strategic profit model (SPM) and the economic value-added (EVA to measure shareholder value). SPM measures the return on net worth (RONW) which is defined as the return on assets (ROA) multiplied by the financial leverage. EVA is defined as the firm's net operating profit after taxes (NOPAT) minus the capital charge. Both, RONW and EVA provide an indication of how much shareholder value a firm creates for its shareholders, year on year. With the increasing focus on creation of shareholder value and core competencies, many companies are outsourcing their information technology (IT) related activities to third party software companies. Indian software companies have become leaders in providing these services. Companies from several other countries are also competing for the top slot. We use the SPM and EVA models to analyse the four listed players of the software industry using the publicly available published data. We compare the financial data obtained from the models, and use peer average data to provide customized recommendations for each company to improve their shareholder value. Assuming that the companies follow these rules, we also predict future RONW and EVA for the companies for the financial year 2005. Finally, we make several recommendations to software providers for effectively competing in the global arena.

FREE CASH FLOW (FCF), ECONOMIC VALUE ADDED (EVA™), AND NET PRESENT VALUE (NPV):. A RECONCILIATION OF VARIATIONS OF DISCOUNTED-CASH-FLOW (DCF) VALUATION

ABSTRACT The paper assists the user of DCF methods by clearly setting forth the relationship of free-cash-flow (FCF) and economic value added (EVA™) concepts to each other and to the more traditional applications of DCF thinking. We follow others in demonstrating the equivalence between EVA and NPV, but our approach is more general in that it links the problems of security valuation, enterprise valuation, and investment project selection. Additionally, our approach relates more directly to use of standard financial accounting information. Beginning with cash budget identity, we show that the discounting of appropriately defined cash flows under the free-cash-flow valuation approach (FCF) is mathematically equivalent to the discounting of appropriately defined economic profits under the EVA™ approach. The concept of net operating profit after-tax (NOPAT), found by adding after-tax interest payments to net profit after taxes, is central to both approaches, but there the computational similarities end. The FCF approach focuses on the periodic total cash flows obtained by deducting total net investment and adding net debt issuance to net operating cash flow, whereas the EVA™ approach requires defining the periodic total investment in the firm. In a project valuation context, both FCF and EVA™ are conceptually equivalent to NPV. Each approach necessitates a myriad of adjustments to the accounting information available for most corporations.

Wertorientierte Unternehmensführung bei Siemens

Siemens continues to drive its entire management system enterprise-wide to focus on Economic Value Added (EVA), known at Siemens as “Geschaftswertbeitrag” (GWB). Basically, GWB is defined as net operating profit after taxes (NOPAT) before financing costs minus capital cost, which represent the return minimum on capital employed. According to this concept a business creates value only when it recovers its cost of capital and furthermore fulfills the expectations of capital markets regarding GWB improvements. Because the three major components of Siemens — Operations, Financing and Real Estate, and Pension Fund — are fundamentally different from each other, Siemens adjusts its calculations of GWB for each one. Ambitious GWB targets, GWB-oriented compensation schemes and extensive value reporting are integral components of value-oriented management at Siemens.