Question

for the past year kayla inc has sales of 43847 interest expense of 2840 cost of goods sold of 14384 selling and administrative expense of 10531 and depreciation of 4530 if the tax rate is 38% what is the EBIT

Answer 1

The EBIT for the past year for kayla inc is 14402

What does EBIT mean?

EBIT is an acronym for earnings before interest and tax, in other words, the profit earned by the company before interest and tax payments

In essence, when computing EBIT we would disregard interest and taxes

EBIT=sales-cost of goods sold-selling and administrative expense-depreciation

sales=43847

cost of goods sold=14384

selling and administrative expense=10531

depreciation =4530

EBIT=43847-14384-10531-4530

EBIT=14402

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