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    Question

    Calculate the EBIT of the company given the following

    details: Sales: ₹20,00,000  Cost of Goods Sold: ₹14,00,000  Operating Expenses: ₹3,00,000  Interest: ₹50,000  Tax Rate: 30% 
    A ₹1,75,000 Correct Answer Incorrect Answer
    B ₹1,40,000 Correct Answer Incorrect Answer
    C ₹1,35,000 Correct Answer Incorrect Answer
    D ₹1,20,000 Correct Answer Incorrect Answer
    E ₹3,00,000 Correct Answer Incorrect Answer

    Solution

    EBIT = Sales – COGS – Operating Expenses = 20,00,000 – 14,00,000 – 3,00,000  = Rs.3,00,000 Other Profitability Metrics that can be calculated: • Gross Profit = ₹20,00,000 – ₹14,00,000 = ₹6,00,000  • PBT = ₹3,00,000 – ₹50,000 = ₹2,50,000  Tax = 30% of ₹2,50,000 = ₹75,000  • PAT or Net profit = ₹2,50,000 – ₹75,000 = ₹1,75,000 

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