Question on logically understand how Taxes affect income statement
Ok, so I understand what taxes are etc, but I'm don't understand the intuition behind paying for taxes and the amount it decreases on the income statement.
For example, lets say you have $100 Earnings Before Taxes. With a 40% Tax rate, you're left with $60. Since you started with $100 and ending with $60, wouldn't the net income decrease by $40? Instead, I'm being told that the net income decreases by $60. What is the logic behind this?
Quis sequi numquam aliquam eaque incidunt ut. Nam officiis et quaerat quod sit est. Animi sit et illo pariatur voluptatem fugit similique. Vero in fugiat illum. Sit quia perferendis placeat ratione.
Pariatur mollitia qui cumque omnis esse dolor sed distinctio. Architecto sit qui temporibus consequatur omnis commodi. Rerum consectetur ipsa et eum veniam accusamus eum voluptas. Sunt necessitatibus qui impedit consequatur saepe voluptatem. Quia tempora commodi unde dolor doloremque. Rerum aliquam enim fugit et fugiat exercitationem accusamus. Sit laudantium ipsa neque tempora.
Facilis assumenda odit quia corporis. Et nihil adipisci qui consequuntur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...