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Hi tutor
I have a question regarding June 2014 ratio analysis. why is interest expense being added to profit before interest and tax figure?According to the question, profit before tax is $16,250 and that figure is arrived at after having deducted Finance costs – loan note interest $1,750)
And we want the figure Profit BEFORE interest and tax
So we have to add back the loan interest of $1,750 and we arrive at $18,000
Does that answer it?
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