Forecasting Earnings before Tax
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Earnings Before Income Taxes
Earnings Before Income Taxes appear on the Income Statement and is calculated by subtracting "Sales" from "Cost of Goods Sold" & "Operating Expenses". Below summarizes Murray's forecasted Earnings Before Income Taxes for the business years ending December 31, 200X and 200Y.
| 200X |
200Y |
|
| Forecasted Sales | $104,000 | $192,000 |
| Less: Forecasted Cost of Goods Sold | $ 12,000 | $ 26,141 |
| Less: Forecasted Operating Expenses | $ 84,171 | $141,098 |
| Earning Before Income Taxes | $ 7,829 | $ 24,761 |
As you can see, Murray's 200X Forecasted Earnings Before Income Taxes is $7,829. This figure will be later used to determine Murray's 200X Income Tax obligation. Also shown in the above chart, Murray's 200Y Forecasted Earnings Before Income Taxes is $24,761. Again, this figure will be later used to determine Murray's 200Y Income Tax obligation.