Question

Arco Steel, Inc. generated total sales of $44,736,836 during the fiscal year. Depreciation and amortization for the year totaled $2,844,614, and cost of goods sold was $25,136,475. Interest expense for the year was, $9,292,755 and selling, general, and administrative expenses totaled $5,452,780 for the year. What is Arco's EBIT?

Answer 1

EBIT stands for Earnings Before Interest and Taxes. It is calculated by subtracting the cost of goods sold and selling, general, and administrative expenses from the total sales. In this case, Arco Steel, Inc.'s EBIT is $14,147,581.

Step-by-step explanation:

EBIT stands for Earnings Before Interest and Taxes. It is a measure of a company's operating profitability and represents the company's earnings before deducting interest expenses and income taxes. To calculate EBIT, you need to subtract the cost of goods sold and the selling, general, and administrative expenses from the total sales.

In this case, Arco Steel, Inc.'s EBIT can be calculated as follows:

EBIT = Total Sales - (Cost of Goods Sold + Selling, General, and Administrative Expenses)

EBIT = $44,736,836 - ($25,136,475 + $5,452,780) = $14,147,581