Income Statement

Question 1

Income Statement

Answer 1

Revenue/Sales
(Cost of Goods Sold)

Gross Margin/Profit
(General, Selling, and Administrative)

EBITDA
(Depreciation and Amortization)

EBIT
(Interest expense)

EBT
(Taxes)

Net income or Profit After Taxes (The Bottom Line)

Question 2

Cost of goods sold is expenditure that is ______

Answer 2

related to product

Question 3

Gross margin or profit shows how efficiently ____ are covered

Answer 3

costs

Question 4

General, Selling, and Administrative Expenses consist of _________

Answer 4

overhead and indirect costs

Question 5

Depreciation and Amortization are _____ payments

Answer 5

Non-cash

Question 6

EBITDA stands for

Answer 6

Earnings Before Interest, Taxes, Depreciation, and Amortization

Question 7

Amortization is

Answer 7

the value of intangible assets like patents or goodwill depreciating over time

Question 8

Bank lending depends on EBITDA/EBIT?

Answer 8

EBITDA

Question 9

A country’s GDP is made up of the sum of ______

Answer 9

all its companies’ revenues

Question 10

NOPAT

Answer 10

Net Operating Profits After-Taxes

Question 11

NOPAT equation

Answer 11

EBIT x (1 - tax rate)

Question 12

You should deduct taxes before interest expense, true or false?

Answer 12

FALSE, this is a common mistake.

Question 13

To calculate interest expense, you should multiply interest rate by EBIT, True or False and why?

Answer 13

False

Interest has nothing to do with operating profit; you should multiply interest rate by amount borrowed

Question 14

Net income consists of

Answer 14

retained earnings and dividends