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%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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