JR's Jigsaws had Sales of $20,000 in the current year. The Cost of Goods Sold was $13,000, General and Administrative Expenses were $2,000 Interest Expenses were $1,000 Depreciation was $2,000 The firm's Tax Rate is 35% a) What is Earnings Before Interest and Taxes? ______________________ DO NOT USE DOLLAR SIGNS IN YOUR ANSWERS! b) What is Net Income? ___________________
JR's Jigsaws had Sales of $20,000 in the current year.
The Cost of Goods Sold was $13,000,
General and Administrative Expenses were $2,000
Interest Expenses were $1,000
The firm's Tax Rate is 35%
a) What is Earnings Before Interest and Taxes? ______________________
DO NOT USE DOLLAR SIGNS IN YOUR ANSWERS!
b) What is Net Income? ___________________
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Earnings Before Interest and Taxes(EBIT) : EBIT is the level of earning that comes after paying all operating expences other than Interest and tax. EBIT can be calulated are as follows
EBIT =Sale -Cost of goods sold -operating expences including depreciation
Net income : Net income is that level of income which come after paying all expences and is available to retain in business or distribute dividend.
Net income = EBIT-Interest-Tax
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