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Operating Profit Less Capital Charge Calculator

Subtract a modeled capital charge from after-tax operating profit.

  • Formula & worked example
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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Edit a calculated value to solve backwards, or lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

After-tax operating profit of 100,000, invested capital of 600,000 and a capital cost of 10% give a 60,000 capital charge and residual profit of 40,000.

Residual operating profit = NOPAT − invested capital × WACC

Worked example

Enter these known values and leave the other values blank.

NOPAT
100000 USD
Invested capital
600000 USD
WACC
10 %
Economic value added
40000 USD
Invested capital
600000 USD

Assumptions and limitations

  • The breakdown subtracts current liabilities from total assets. That simplified definition can differ from operating invested capital used in valuation. You can instead enter your own capital amount. This model makes no accounting adjustments automatically and is not a full valuation.
  • Use consistent units, dates and financial definitions. The calculated result follows the stated assumptions and the amounts entered.

Common questions

How is invested capital calculated in the optional breakdown?

The breakdown subtracts current liabilities from total assets. That simplified definition can differ from operating invested capital used in valuation. You can instead enter your own capital amount. This model makes no accounting adjustments automatically and is not a full valuation.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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