ROE

[SriHanuman]

ROE= NOPAT/Equity - Net interest expense after tax/ equity
How is …………….Net income = NOPAT - Net interest expense after tax.??

 

[S2000magician]

NOPAT = EBIT(1 − t)
NOPAT – net interest expense after tax
= EBIT(1 − t) – int(1 − t)
= (EBIT – int)(1 − t)
= EBT(1 − t)
= Net Income