Using EBITA Instead of NOPLAT Is a Best Practice for Testing

question 1

True/False

Using EBITA instead of NOPLAT is a best practice for testing the sum-of-the-parts valuation based on multiples of peers.

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Definitions:

Special Tools

Custom or unique tools designed for specific tasks or projects, often not found in standard toolsets.

Productive Capacity

The maximum output a system can produce over a set period under normal or full-scale operating conditions.

Variable Factory Overhead

Costs that vary with the level of production, such as supplies and energy for machinery.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor. Also known as manufacturing overhead, this includes costs such as utilities, depreciation, and maintenance of equipment.