Net Income - An Equation For Net Income

An Equation For Net Income

Net sales (revenue)
– Cost of goods sold
= Gross profit
– SG&A expenses (combined costs of operating the company)
= EBITDA
– Depreciation & amortization
= EBIT
– Interest expense (cost of borrowing money)
= EBT
– Tax expense
= Net income (EAT)

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