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Which profit should be used to calculate PBIT?
Operating profit or controllable profit..? can I get the reason for choosing the profit to cal PBIT?
It depends for what reason you are being asked to calculate it!!!
If it for appraising the performance of a divisional manager then we take the controllable profit because the manager cannot be made responsible for factors that he/she does not control.
Have you watched my free lectures on divisional performance measurement?
Got it !! Thanks ya
You are welcome.