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Calculating Pretax Financial Income

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

_____ is the earnings a company generates before deducting the taxes it needs to pay.

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1. Analysts like pre-tax income because it allows them to compare companies who have different levels of _____

2. Pre-tax financial incomes is also referred to as _____

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About This Quiz & Worksheet

This quiz/worksheet set allows you to find out what you know about figuring out a company's rate of pre-tax income. These questions will focus on how and why this measurement is used.

Quiz & Worksheet Goals

In this quiz, you'll measure your understanding of:

  • The reason analysts prefer certain forms of income over others
  • Other names for pre-tax income
  • Items that have a large impact when calculating pre-tax income

Skills Practiced

  • Critical thinking - apply relevant concepts to examine information about the benefits of reporting pre-tax income in a different light
  • Information recall - access the knowledge you've gained regarding the names given to a company's income before taxes are deducted from it
  • Knowledge application - use your knowledge to answer questions about what items are included under pre-tax income calculations and what are separated

Additional Learning

You can find out more about this corporate reporting concept by reviewing the lesson titled Calculating Pretax Financial Income. This lesson will make sure you understand:

  • Examples of the way this information is used
  • Operating income
  • The effect on income for companies situated in different countries
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