ocr: Examining. the Figures In our example the business has earned a net profit before tax of €266 but we have to take account of the fact that hidden within the indirect expenses charge of E734is the interest payments made to the suppliers oflong-term debt capital. We can see trom the Balance Sheet that the company has a long term liability of E1400 worth of 8% debentures and theretore it has to make: 8% x £1400 = E112 ofinterest payments. We can now calculate the profit betore interest and tax figure as. €266 + £112=£378
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