In the income statement, EBIT minus interest costs equals ________.
A) gross profit
B) pre-tax profit
C) net profit
D) COGS

Question

Quizplus · Accepted Answer

EBIT stands for Earnings Before Interest and Taxes, so when we subtract the interest costs we arrive at the pre-tax profit. Choice A, gross profit, refers to the revenue minus the cost of goods sold and does not take into account operating expenses or taxes. Choice C, net profit, is the final figure after subtracting all operating expenses, interest costs, and taxes. Choice D, COGS (Cost of Goods Sold), refers to the direct costs involved in producing a product and is not related to EBIT or interest costs.

In the Income Statement, EBIT Minus Interest Costs Equals ________