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What is Net Profit Plus Interest After Taxes
Net profit plus interest after taxes is a term that refers to Earnings after taxes (EAT) to which are added taxed interest cost.

Net profit plus interest after taxes, abbreviation is usually not used. It is a term that refers to Earnings after taxes (EAT) to which are added taxed interest cost.

This indicator takes into account that interest expenses create a tax shield (i.e. their inclusion into cost reduces a tax basis).

Calculation: Net profit plus interest after taxes = EAT + Interest cost × (1 – t).

Use of Net profit plus interest after taxes in practice: in business it is used by CFO in financial analysis to analyze ratios.

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Last update: 14.01.2016

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