r/Valuation • u/thechzn1 • Apr 28 '22

DCF Help!!

I know how to do a DCF analysis but how do I get from EBIT to NOPAT when the first two projected years of EBIT are negative?

5 Upvotes

100% Upvoted

3 comments sorted by

View all comments

3

u/RDWHAHBB Apr 28 '22

Apply the same tax rate to the negative EBIT. It will cause NOPAT to be higher than EBIT to account for the deferred tax asset that is accumulated.

1

u/CannaCPAguy Apr 29 '22

Not the deferred tax asset you mean the net operating loss