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Rai9999 Posted 15 years ago
Business & Finance

A sentence from book I'm reading now.

Hi, can you tell me what does this sentence's mean?

I can't understand it.;(

Retail companies give away 1.7 percent of their profits each year before taxes,compared with approximately 0.9 percent by companies in other industries.

Thank you.

Rai
  

Top answer

Hi Rai, According to your statement, retail companies are more charitable with their profits than other industries. There are two types of profits: "before tax profits" and "after tax profits". Before tax profits are the gross amount of money a company has made before it pays its taxes.

— JohnParis

  • Hi Rai, According to your statement, retail companies are more charitable with their profits than other industries.
  • There are two types of profits: "before tax profits" and "after tax profits".
  • Before tax profits are the gross amount of money a company has made before it pays its taxes.
  • The final amount of taxes the company will pay is based on this amount.
  • Most tax authorities allow you to give away a certain percentage of your "before tax" profits to charities to encourage giving and help pay for other social needs.
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2 Answers
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Hi Rai,

According to your statement, retail companies are more charitable with their profits than other industries. There are two types of profits: "before tax profits" and "after tax profits".

Before tax profits are the gross amount of money a company has made before it pays its taxes.

The final amount of taxes the company will pay is based on this amount.

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Perfect answer ever! Now I can totally understand that sentence now.

Very helpful![L]
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