Profitability Indicator Ratios: Effective Tax Rate

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   Series : Ratio Analysis    (7 th Post)

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This Ratio helps us to understand the Tax Rate of a Corporation/Company.For calculating this Tax we use Income Tax Expense & Pre tax  Income.

Formula:  Effective Tax Rate % =  Income Tax Expense /  PreTax Income

Example:

Go to  Moneycontrol.com  Website  here is  an Online Link for the same http://www.moneycontrol.com/financials/relianceindustries/ratios/RI#RI                            Select the Ratios under the Financials Tab  & look for the  “ Profit Before Interest And Tax Margin(%) “

Next Post on Ratio Analysis:  Profitability Indicator Ratios (Return On Assets)

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