William Blue Pty Ltd has sales of $1600 for the financial year ended 30 June 2010.The associated cost of goods sold is $800.The depreciation charge for the year is $50 and interest paid was $80.If the average tax rate is 30% what is EBIT for the year?

Question

Quizplus · Accepted Answer

EBIT (Earnings Before Interest and Taxes) is calculated as Sales minus Cost of Goods Sold and Operating Expenses (excluding interest and taxes). Here, EBIT = $1600 (Sales) - $800 (COGS) - $50 (Depreciation) = $750.

William Blue Pty Ltd Has Sales of $1600 for the Financial