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Net Profit (Do we take the adjusted figure after add/remove extraordinary items)

Questions › Category: Financials Quadrant › Net Profit (Do we take the adjusted figure after add/remove extraordinary items)
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Yong asked 4 years ago

Hi, in the module lessons, the Net Profit figure – should we be using the Adjusted Net Profit for all financial metric calculation after add/remove Extraordinary Items? 
Thanks.

2 Answers
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Victor Chng answered 4 years ago

Hi Yong,
 
Yes your profit should be adjusted after you add/remove extraordinary item.

Yong replied 4 years ago

Thanks. was looking at formula of CashFlow to Net Profit ratio. It was based upon the non-adjusted NP. Should I take the adjusted NP instead?

Was watching the videos, the NP taken is it the pre-tax or post-tax allocation amount? I believe in the video the example used was a pre-tax, hence it was a higher NP. Thanks!

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Victor Chng answered 4 years ago

Hi Yong,
 
Cash Flow to net profit is based on the non-adjusted NP.
 
For net profit, please take the post tax figure.