ECONOMIC PROFIT title: economic profit (FIN-SEM) (SAP Library - Glossary)
ECONOMIC PROFIT category: Strategic Enterprise Management (FIN-SEM)
ECONOMIC PROFIT explained:
Economic Profit is a single-period key figure that measures the return on an investment.
Methods of calculation:
using the Capital Charge method:Economic Profit = NOPAT - WACC * invested capital
using the Value Spread method:Economic Profit = (ROCE - WACC) * invested capital, where...
NOPAT = Net Operating Profit after Tax
WACC = Weighted Average Cost of Capital; weighted by equity and liabilities taking the risk into account)
ROCE = Return on Capital Employed (realisierte Rendite)
= NOPAT / invested capital
From the shareholder point of view, the investment in an enterprise is value-added as long as the realized return is greater than the cost of the invested equity and liability.
More terms such as economic profit in Dictionary E.
- Manual Export Ledger:
- Help ledger assigned to a special purpose ledger if the data of the special purpose ledger is to be sent from a local system to a central system. The export ledger stores the balances of all previous data economic profit definition.
- Manual Evaluation Period (PP-FLW):
- Help The period with which you can evaluate the operating time utilization of a production line in sequencing economic profit explain.
- Manual Empties Update:
- Help Automated, ongoing, time-specific recording of all empties-relevant transactions in value and quantity economic profit what is.
- Manual Expense Claim:
- Help The reimbursement of expenses incurred as a result of executing the terms and conditions of an agreement economic profit meaning.
- Manual Excise Duty Status:
- Help The excise-duty status of a material may be e.g. taxed or untaxed economic profit abbreviation.
