ADM-Practice Test 2

Which of the following formulas correctly calculates Earning Before Interest and Tax (EBIT)?

• Net profit before tax + Interest + Tax
• Revenue - Cost of Goods Sold - Operating Expenses
• Gross Profit - Operating Expenses - Interest
• Revenue - Cost of Goods Sold - Operating Expenses - Interest

What is the formula for calculating Net Profit Before Tax (NPBT)?

• Revenue - Cost of Goods Sold - Operating Expenses - Interest - Tax
• Gross Profit - Operating Expenses + Interest
• Net Profit After Tax (NPAT) + Tax
• EBIT - Interest

Which of the following statements is true regarding Net Profit After Tax (NPAT)?

• NPAT is the profit earned by a company after deducting all expenses including taxes.
• NPAT is calculated as Revenue - Cost of Goods Sold - Operating Expenses - Interest.
• NPAT is calculated by subtracting taxes from EBIT.
• NPAT is also known as the company's bottom line.

A company has the following financial information for the year: Cost of Goods Sold: $150,000 Income Tax Expense: $20,000 Interest Expense: $10,000 Operating Expenses: $100,000 Revenue: $500,000 Calculate the Earnings Before Interest and Tax (EBIT).

• $250,000
• $230,000
• $140,000
• $90,000

A company has the following financial information for the year: Cost of Goods Sold: $600,000 Depreciation Expense: $100,000 Interest Expense: $50,000 Operating Expenses: $300,000 Revenue: $1,500,000 Income Tax Rate: 30% Calculate the Net Profit After Tax (NPAT).

• $315,000
• $234,000
• $201,000
• $180,000

A company has the following financial information for the year: Revenue: $1,000,000 Cost of Goods Sold: $400,000 Operating Expenses: $200,000 Interest Expense: $50,000 Income Tax Expense: $100,000 Calculate the Net Profit Before Tax (NPBT).

• $350,000
• $300,000
• 250,000
• $200,000

ABC Corporation has the following information for the year ended December 31, 2022: Sales: $500,000 Cost of Goods Sold: $250,000 Gross Profit: $250,000 Total Assets: $750,000 Calculate the Gross Profit Margin.

• 50%
• 40%
• 35%
• 25%

DEF Corporation has the following information for the year ended December 31, 2022: Net Income: $120,000 Total Assets: $800,000 Total Equity: $400,000 Calculate the Return on Assets.

• 14%
• 15%
• 30%
• 10%

GHI Corporation has the following information for the year ended December 31, 2022: Net Income: $80,000 Sales: $100,000 Total Equity: $400,000 Calculate the Return on Equity.

• 16%
• 20%
• 25%
• 30%

JKL Corporation has the following information for the year ended December 31, 2022: Revenue: $1,000,000 Cost of Goods Sold: $500,000 Operating Expenses: $250,000 Depreciation Expense: $50,000 Interest expense:$20,000 Tax Rate: 30% Calculate the Profit Margin using EBIT.

• 10%
• 15%
• 20%
• 25%