Profit After Tax or PAT

Profit After Tax or PAT This is arrived at by deducting expenditure (cost of materials, manufacturing expenses, overheads, interest, and depreciation) from income (net sales plus other income) and providing for taxation and investment allowance reserve on the amount. However, what remains is not entirely distributed among shareholders. A proportion of this – large if the company is growth – oriented – is transferred to general reserve. See PAYOUT RATIO

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