CFA Practice Question

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CFA Practice Question

What is another name for operating profit?

A. Gross profit
B. Earnings before interest and taxes
C. Net income before taxes
D. Net income
Correct Answer: B

Another name for operating profit is earnings before interest and taxes, or EBIT.

User Contributed Comments 10

User Comment
Alfa1 gross profit = EBIT
kalps GOperating profit = earnings before interest and tax (EBIT)
vincenthuang gross profit=EBIT= operating profit
tony1973 No vincenthuang. Gross profit does not equal operating profit.
cbb1 Gross Profit = Revenues less COGS, but Operating Profit = Gross Profit less AS&G.
kimsan Unless one is operating under the banking industry, interest expenses can not be considered as operating expenses.
asianl6 how's B and C different? only that B excludes interest?
dipuo exactly that, asian!
nagri Correcting asian and Dipuo
B&C are differnt not only by interest but also AS&G as cbb1 has clearly explained.
Gross Profit = Sales-COG
Operating Profit= Sales-COG-AS&G or = EBIT
mordja ahhh, think you are comparing A to B nagri.

asian and dipuo are correct when comparing B to C.
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