Cash Flow Statements

This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.

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July 16, 2018 at 12:48 pm #463151
eveadams
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Dear Mr. Moffat,

I can’t understand why you start with Profit before Tax and add the Interest back on only later to subtract it again. Why don’t you just start off with the (PBIT) Profit before Interest and Tax in the first place?
July 16, 2018 at 4:13 pm #463237
John Moffat
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We could start with the profit before interest and tax, but strictly (according to the format in the accounting standard) we are supposed to start with the profit before tax and add back the interest so as to then have the profit before interest and tax 🙂
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