Suppose that the income tax rate is 21% of the profit before taxes, what is the net income of the company?

To find the net income of the company given the income tax rate and the profit before taxes, you can use the following formula:

\[
\text{Net Income} = \text{Profit Before Taxes} \times (1 - \text{Tax Rate})
\]

Given:
- Tax Rate = 21% or 0.21

Let \( P \) be the profit before taxes.

The formula becomes:

\[
\text{Net Income} = P \times (1 - 0.21)
\]

\[
\text{Net Income} = P \times 0.79
\]

So, the net income is 79% of the profit before taxes.

If you provide the specific profit before taxes, I can calculate the exact net income.

Would you like more details or have any questions?

Here are some related questions you might find useful:

1. What is the impact of a different tax rate on the net income?
2. How do you calculate the effective tax rate if there are multiple tax brackets?
3. How do changes in the tax rate affect company budgeting?
4. What is the formula to determine profit before taxes if net income is known?
5. How does depreciation affect taxable income?
6. What are some strategies companies use to minimize their taxable income?
7. How do deductions and credits affect the overall tax rate?
8. How does the corporate tax rate compare to individual income tax rates?

**Tip:** Understanding how tax rates affect net income is crucial for financial planning and analysis in any business.

Understand how to calculate net income using a 21% income tax rate on profit before taxes. Includes step-by-step formula application and examples. Essential for financial analysis and business planning.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation