Profit for the objective of calculating a ratio may be taken as
A)Profit before tax but after interest
B)Profit before interest &tax
C)Profit after interest & tax
D)All the above

Question

Quizplus · Accepted Answer

Profit for the purpose of calculating a ratio can be considered in different ways depending on the specific ratio being calculated. It can be profit before tax but after interest (to analyze operational efficiency excluding tax effects), profit before interest and tax (to analyze operational efficiency without the impact of financial structure), or profit after interest and tax (to analyze the net profitability).

Profit for the Objective of Calculating a Ratio May Be