I am in the middle of an assignment for my Accounting/Finance class and have to complete a income statement in reverse. If I desire a net income of $2.5M, and I know my tax rate is 40%, what would my EBT (earnings before taxes) be? I would assume that they would be $2.5M x 1.6, but this does not seem to work. What is the formula and what is the answer? Thanks!
Mr. Engineer, Formula is EBT - .4EBT = net income, let EBT = x so x - .4x = 2.5mil This yields .6x = 2.5 mil. Solve for x to get 4.16 mil
I knew I should have paid attention in Algebra class! A million thanks to a well-versed group of people! Beleive it or not, I made it through Calculus, but that was in 1984. I guess I had better brush up a bit more before getting in deeper. Cheers a have a great evening.
. . . and before you get to a writing class, note that it would be "gurus" not "guru's." --J. Bear, VP for Nits, who saw a sign on the TV coverage of San Francisco's gay pride parade, that said JESUS DIED FOR YOUR SIN'S