# Earnings Before Interest After Taxes - EBIAT Example

 Earnings Before Interest After Taxes - EBIAT Example carole jones, Student (University), United States I have a question: as I am drowning in a course on financial management. A companys projected sales for 1/2010: \$400,000; 2/2010 \$540000; 3/2010: \$350000, 4/2010: \$450000, 5/2010 \$480000; 6/2010 \$520000; 30% of sales is collected in cash at the time of sale; 60% in the month following the sale, 10% in the 2nd month after the sale. Cost of Goods Sold 70% of sales. Expenses \$50,000 monthly. Company must have \$20,000 cash monthly. What is the earnings before interest and taxes for April 2010? 1. \$85,000, 2. \$159,000 3. \$138,000 4. \$135,000. Please explain steps to arrive at outcome. Thank you.
 EBIAT Calculationjosh wolf, Analyst, United StatesApril revenue = \$450,000 COGS = 70% of revenue = \$315,000 Expenses = \$50,000 Earnings Before Interest After Taxes (EBIAT) = 450,000 - 315,000 - 50,000 = \$85,000.

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